Home ownership is a dream come true for many Americans. However, buying your first home can be a daunting task. Our team at GVC Mortgage is here to help you start saving for a down payment on your dream home. Understanding how much to save and how to do it can relieve some of the stress that comes from starting the home buying process.
First, do some research about down payments. It’s easy to overestimate how much money you actually need to get started, especially if you’ve only heard of the “20% rule”. While there are many benefits to putting 20% down, it’s not the only option and it might not be right the right choice for you. In fact, you may be able to buy your home with a down payment as low as 3% depending on the type of loan you qualify for. After you’ve determined which type of loan you are eligible for, calculate what the percentage will be, then add $2,000-4,000 for closing costs, and you’ve got your savings goal.
Now that you’ve got your goal, it’s time to start making sacrifices and life changes to meet it!
- Pay Off Debt – A great place to start is by eliminating high interest debt so you can save that money instead. As an added benefit, paying down your debts will help your credit score which will also help in the home buying process.
- Trim Your Budget – It’s important to know where your money is going each month in order to know where you can cut back. Temporarily cancel cable TV, magazine subscriptions, or unused gym memberships, and put that money in savings. Also, stop eating out and trade in your morning latte for coffee brewed at home. Remember that all these cutbacks are temporary and will be well worth it in the end when you’ve achieved your savings goal.
- Moonlight – Another great way to save money is to increase your income. If you have a typical 9-to-5 job, consider working nights and weekends to make extra money fast. A few examples include freelance writing, babysitting, dog walking, freelance photography, tutoring, selling artwork, or driving for Uber/Lyft.
Once you’ve set a goal and decided on a strategy to meet it, set a realistic time frame for your plan. If you need help with the pre-approval process or want to explore your mortgage options, contact GVC Mortgage at (317) 564-4906. Our team of home loan professionals serves first-time home buyers every day. Our office is convenient for anyone in the Carmel, Fishers, or greater Indianapolis area. Get one step closer to home ownership by calling us today.