April 11, 2017
Saving for a down payment is one of the important things that must be done before you are ready to buy or build a new home. Consider these ideas when saving for your own down payment.
1. Calculate What You Can Afford and Set a Goal
As you look into the possibility of building a home, it is advisable to sit down with a mortgage lender to see how much you qualify for. Most lenders will require at least a 20% down payment when applying for a new home construction loan. However, there are many different types of loan options available (FHA, VA, etc.) that may require less down. Come in and chat with our team of professionals to get an idea of what you can expect to need for a down payment.
2. Decide on a Time Frame
Once you know how much money you will need for your down payment, decide on a realistic time frame to meet that goal. Determine how much money you believe you can save per year and use that number to calculate how long you will need to reach your ideal down payment. Then work towards accomplishing it.
3. Check your Credit Report
Your credit score will be important in your ability to borrow money for your loan and the interest rate that you will pay. Check your credit score now, and determine any improvements you can make to raise your scores so that you can get the best available rates.
To save money, you will need to clear room in your current budget. This could mean either earning additional income or cutting your expenses. Find a budgeting program or app that fits your needs so that you can see exactly where your money is going. Make the necessary changes in your lifestyle, and then be patient and stick to your new budget.
5. Automate your Savings
An easy way to ensure that you are saving money is to make it automatic. Create a separate Savings account and have a portion of your paycheck directly transferred to that account each month. It is less likely that you will miss the money if it is not easily available to use.
6. Save your Windfalls
Whether large or modest, take advantage of any windfalls you receive to add significant chunks of money to your down payment savings. Windfalls involve sudden or unexpected good luck in finances and can include tax returns, inheritances, a hefty bonus, etc. The most likely source of a large amount of money when deciding to build is often the money received from selling your current home. The equity that you have gained in your home can help you move up the real estate ladder to your new home. A windfall can really strengthen your down payment if you can resist the urge to spend portions of it on other things.
7. Get Creative
If you are still trying to find ways to save, get creative!
The options for saving are endless if you put in the effort. With some dedication and creativity, a down payment is within your reach.
If you are interested in building a new home using a Boise home builder, Eaglewood Homes is ready to work with you. If you are ready to get the home building process started but haven’t looked into financing yet, don’t worry, we can help you with that. Eaglewood homes works closely with preferred lenders to make sure you get the best rates and service available. We look forward to helping you realize your new home dreams every step of the way.