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Tips to Saving for a Down Payment

When it comes time to buy a new home, few things are as important as the down payment. In a world of competitive real estate bidding, a down payment gives you extra edge and can help you seal the deal over competing buyers. However, when it comes down to it, saving a down payment can be hard. Experts recommend that you have about 20% of the asking price ready to pay up front, which can be $24,000 on a home that costs around $120,000, not including closing costs. So how do you get that money saved up and ready to put down on a new home? The Jupiter local movers have a few tips for you.

First, find out exactly how much you need. This will give you a goal and a real number to work towards. To find out, you’ll probably have to talk to a real estate agent who can listen to you, understand what you’re looking for and then give you a good estimate of how much your new home is going to cost and how much you’ll need for a down payment. Typically down payment requirements range from 3.5 percent to 20 percent of the purchase price of a home, depending on the lender and loan type.

Get motivated by the home you want. Make a visual reminder of why you’re saving and put it in a very visible place where you’ll see it every day. You can take a picture of a house you want to buy (or even one from a magazine) and put it on a big piece of cardboard or poster board. This visual aid will give you a tangible image of what you are passing up dinners and skipping out on shopping trips for. The human mind doesn’t work like a computer; it needs positive reinforcement to continue doing something or else it will lose interest and then you’ll lose momentum.

Find out what keeps preventing you from saving. Take a close look at your spending for the past two months and see which categories of spending can be reduced substantially. Maybe you’ve been eating out too often, been buying yourself too much clothing or shoes, or maybe you’ve been traveling a lot and you need to cut back until you’ve saved for your down payment. Find a healthy and free extracurricular activity to help you save towards your goal.

Freelance work to make extra cash. Even if you think you don’t have any marketable skills, there are probably some jobs on these sites you could bid on. For example, people are making money right now as virtual assistants, writers, designers, transcribers, etc., while working from home in their free time. Check out sites like Elance.com or oDesk.com to find gigs.

It will be a long and difficult road, but once you get the money saved it will be well worth it. Keep your eyes on the prize and you will be the proud owner of a new home in no time.