It takes time to save up money, but putting more money down when you buy your home saves you thousands of dollars in interest.
An added bonus is that if you put at least 20% of the purchase price down you don’t have to pay private mortgage insurance or PMI, which tends to cost hundreds of dollars every month.
Many people don’t realize just how much money they spend grocery shopping. Plan meals ahead of time and only buy what you need.
Set aside money in a savings account each month that is the difference between what you’re currently paying for rent and how much you expect to pay for your mortgage.
Consider eliminating your landline if you still have one or take your cell phone plan down to the basics to cut costs.
Another thing that you should be considering is meeting with a financial consultant. They can look at your personal finances and show you where you can be saving additional money and where you can cut spending.
Set a Grocery Budget
Many people don’t realize just how much money they spend grocery shopping. Plan meals ahead of time and only buy what you need.
A list helps keep your spending in check, and it also discourages you from making impulse purchases such as sweet or salty foods you didn’t intend to get initially. Knowing what you’re spending ahead of time aids in keeping your monthly finances in control.
Set Aside the Difference
Set aside money in a savings account each month that is the difference between what you’re currently paying for rent and how much you expect to pay for your mortgage.
Don’t forget to include taxes, home insurance, and PMI if you expect to put less than 20% of the purchase price down. If you currently pay $600/month for rent, but you anticipate the mortgage on a home to be $950, you’ll need to account for that extra $350/month.
This helps you see if you can truly afford to buy a home in the price range you’re looking at. A realty company such as Century 21 Town & Country can help you analyze your costs to determine what is affordable.
Cut Down on Entertainment
Satellite or cable television might be convenient, but it’s pricey. Cut the cord on your subscription and consider using a cheaper streaming service to watch both television shows and movies, with significantly fewer commercials.
Financial Consulting
Another thing that you should be considering is meeting with a financial consultant. They can look at your personal finances and show you where you can be saving additional money and where you can cut spending.
Sometimes it is good to have an extra pair of eyes looking at your finances that way you can give yourself the best chance to qualify for your mortgage.
Look into Assistance Programs
All mortgages are not the same. There are many different types of mortgages that vary with interest rates, qualifications, down payment required and other terms and conditions.
Some homebuyer programs also offer matching contributions to help build up your down payment. It’s free money and helps you get into your home quicker. In order to get the right mortgage for you, you will want to meet with a mortgage consultant.
They will be able to help place you with the best mortgage possible depending on what your financial situation is.
They will also walk you through the process of getting your loan pre-approved. Once you are pre-approved you are ready to start searching for your new home.
With self-discipline and some cutbacks in daily spending, you’ll be able to save enough money for the home you’ve got your eye on.
With self-discipline and some cutbacks in daily spending, you’ll be able to save enough money for the home you’ve got your eye on.
And if you don’t have your eye on one just yet, but are looking into the possibility in to buying a new home, these few tips will help you be prepared. Being smart with money is a smart step in the right direction.
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