Buying your dream home is one of your biggest possible achievements. However, buying a house is a tremendous financial responsibility, and the down payment can really hurt your budget. The sooner you start saving, the higher the chances of being able to afford your desired property.
4 Tips That Will Help First-Time Home Buyers Afford Their Down Payment
In this blog, we cover 4 useful tips that will help first-time homebuyers afford their down payment.
1) Cut down on your credit cards
Reduce credit card spending, pay off debt, and avoid spending on luxury items. In the long-term, this will reduce your interest payments and increase your credit score. Use your credit cards only as a last resort and try to repay them as quickly as possible, ideally within the same month.
2) Sell off unnecessary assets
You might have to give up certain items and services that are taking a toll on your paycheck. For example, if you have an additional car that you rarely use, you could consider selling it to gain extra capital. If you’re subscribed to any music or video services that you could do without, consider cancelling them.
3) Curb your overspending habits
Keep your dream house in mind every time you have an urge to buy something that isn’t an immediate priority. If you’re a shopaholic, stay away from retail outlets and the mall. Discuss how to form a budget with your partner in order to optimize your paycheck.
4) Set up a down payment goal
Analyze your fixed and unavoidable costs, assess your financial position, and choose a down payment that can work for you. You should still stick to it even if you’re approved for a full payment loan. Typically, most first-time homebuyers opt for a down payment of 20%. The more you save for your down payment, the higher equity you’ll have in the house. You’ll also save on future interest payments.
Drew Mortgage Associates is a well-established name in the field of mortgage lending that can give first-time homebuyers expert advice. If you’re seeking help in choosing the right home loan program for your needs, Drew Mortgage can help. Contact them for a free consultation today!