As you move on and tackle the overwhelming mortgage interest rates, the cost of maintaining a home, utility bills and other daily expenses, it is important that every home buyer should first prepare the needed funds to serve as down payment for a mortgage loan. Most mortgages last for about fifteen to thirty years. However, most house hunters are looking to find and secure a home loan, and those years sound more like the amount of time needed to save for a home down payment.
Studies show that it takes more than twelve years to save up the regular home down payment rate of twenty percent. This reality might take even longer because of the continuous rise in home prices.
Statistics may scare you, but saving up for a home down payment does not have to take that long. We will be discussing how you can beat the financial odds and have your own home down payments in less than a year.
Scrape off the small things that pile up
A financial expert explains that there are several thrifty strategies that can help you save up. Review your day-to-day expenses, and try to cross out the bills that you can actually live without. Remember, this should be an easy task if you will remind yourself what you are saving for, which is the home down payment. For example, instead of subscribing for a monthly cable, try Netflix instead. This small act will go a long way, and you will be surprised with the amount of money you can actually save in a year.
Instead of staying in a posh flat, try to split the rent with a trusted roommate. This allows the excess money to go straight to your mortgage savings. For college students and young professionals, try to settle with a used car instead of buying a brand new car. The amount of money that you can save from this action is so significant; it brings you closer to your target home down payment amount. You will be surprised on how low you can go with your expenses if you only have the right mindset to let go of the expenses that eat your savings, and settle a bit for less expensive commodities to save more. These actions, and other options that you can think of that fits your current situation, allows you to save up to $30,000 in less than a year. The amount looks ambitious, but if you will look at your daily expenses in a different perspective, you will be amazed that you can actually save this much or even more. All it takes is a good observation, and as sound decision.
While you are at it, you may want to discuss with your financial adviser on what savings scheme can help you maximize the amount of money that is already in the bank. There are deposit accounts that offer good interest rates that can squeeze more of what you are currently saving. In the long run, once you have met your target amount for a home down payment, the savings you have in the bank can grow in its own rate. Also, within the several months of saving up from the reduction of some of your usual guilty pleasures, you can now assess if you can totally let go of these expenses forever. The amount you pay on the subscriptions you have terminated can be placed in the bank, and let it grow altogether even right after you completed your target amount.
Financial experts said that there is no small or big startup savings. The mentality of individuals who think that the amount they are saving is “too small to actually buy anything” will never go anywhere. A firm decision to start is the most important factor in accomplishing this goal. That decision is something that actually sets apart the individuals who are serious in buying a home in the near future, and those individuals that will just keep the vision of having a house suspended as a dream.
The success of speeding up the accumulation of funds for a home down payment can be frustrating and boring at times. It will require a critical mindset, and a goal that you should stick to. The only factors that you should not neglect are the basic needs, any amount that floats outside your basic needs should go straight to the bank.
No goal is impossible if you have the right attitude to go for it. What is important is that you start reaching for what others think as impossible. There can be hurdles along the way, but if you have the will to stay focused, you can go a long way, and that long way leads to your new home.