Buying a house nowadays is made even more affordable thanks to mortgage loans. You can finally buy a house even if you can’t afford the 20% down payment. For as long as you qualify for the minimum mortgage requirements, you can finally buy a house of your own.
Now, even average wage earners can avail one of the many home loan options to realize your home purchase. Gone are the days when homebuyers can only buy a house with a 20% down payment. Now, you can qualify for mortgage options such as Fha Loans San Antonio which only requires as little as 3.5% down payment. This amount is a lot smaller than your average 20% upfront fees. However, many are still struggling to save for a down payment.
If you plan on applying for Fha Loans San Antonio, or any mortgage option for that matter, here are some of the best ways to save up for the down payment.
First, know the amount you need to save.
Before you start saving for the down payment, check how much you need to save. This way, you’ll have a better idea of how much down payment you will need. Talk to a reputable mortgage lender, and they can help you calculate the numbers based on your situation. They can also help you check which home loan type you can qualify for.
Good Read: How to Pick the Best Bank for Your Mortgage
Determine your purchase date
The second step is to check and see when you wish to make your dream home purchase. Remember that the shorter the timeframe, the higher the amount you need to save to keep up with your timeline. For example, you need to save $30,000 for the down payment, and you plan on buying a house in the next five years. $30,000 divided by five years is $6,000.00 per year. So, in the next five years, you need to save at least $6,000 to keep up.
Look for ways on how to save money
Now that you know how much down payment you need and when you need it, it’s time to start saving. Find the best way that will help you save for your down payment. There are lots of ideas on how you can do this. You can choose to consistently set aside some cash each month and put them in your savings account. You might want to try a certificate of deposit, or high-yielding savings account instead of the regular ones. You also have the option to tap into your retirement plan if you have one as a source of your funds.
Avoid risky investments
The thing with saving cash for a DP is that you need to keep up with your timeframe. Investing in risky deals in hopes of saving some money might not be the best idea. It includes real estate investment trusts and the stock market. While you can earn a considerable amount of money using these investment vehicles, there’s also the risk of you losing your investment in the process.
Automate your savings
One of the best ways to save money for your down payment is by automating your savings. Allocate a percentage of your monthly income that will go straight to a savings account dedicated for your down payment. This way, you get to reduce the temptation of spending the money elsewhere.