Best Ways to Plan for Your Down Payment

October 19, 2022 | Posted by: Justin Emilio

Best Ways to Plan for Your Down Payment

Do mortgages seem unaffordable? These tips will help you plan for your down payment so you can start talking to a private lender mortgage broker in no time.

Buying your first house can be exciting, but before you can start to tour potential homes, you need to save a reasonable down payment. Large down payments are the number one reason why people struggle to get on the housing market, but they don't have to keep you from securing a mortgage forever. The following are a few useful tips that will make paying your down payment an obtainable financial goal.

Look at Your Current Rent

If you want to invest in a home, you might need to downsize temporarily to make that happen. Sometimes reducing your rent is the best way to make that happen. If you can save a hundred or two a month, that could accumulate to an extra $2,400 a year which adds up in just a few years to become a sizable part of your down payment savings fund. It may mean less space or commuting slightly farther, but when you step across the threshold of a new home, it will be worth it.

Set Your Priorities

Downgrading your rent is just one example of how you can reframe your priorities, but there is more you can do to reduce the time it takes to start looking at mortgages with a private lender mortgage broker. Look at your monthly budget and cut down or even eliminate excess spending. For example, if you eat out frequently or take vacations often, then it may be time to par down to eating out once a month and only one family vacation. Once again, while it may be less entertaining for a year, it will pay off when those small decisions get you into a home.

Create a Budget

One of the top reasons young professionals don't easily obtain mortgages is that they are not adept at financial planning. If you do not yet have a budget, now is the time. Attempting to save on the fly is a near impossible task. While you need to be mindful of your goals during your everyday life, you also need to create a budget that helps you support the bigger goal of becoming a homeowner.

Consider Ditching a Car

If you and your partner currently have a car, it may be time to consider ride splitting or making use of public transit public options more. Maintaining two car payments can be costly, and cutting out one altogether can quickly help you save thousands of dollars in just a year's time. When added to your lowered rent, this can make a powerful month on your monthly finances and make eventual mortgages much more affordable. Keep in mind that not only are you saving on your monthly car payments but also on maintenance, car insurance premiums, and gas.

Talk to Private Lender Mortgage Brokers

Securing a mortgage can be daunting, but sometimes there are programs for first-time homebuyers that can help alleviate some of the pressure. Even if you are not yet ready to buy a home, it is a good idea to set up a meeting with a private lending mortgage broker. They can help guide you through your options and also help you get a realistic idea of how much you need to save for a viable down payment. Having tangible numbers in hand can help motivate you to work harder.

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