First, you have to decide what percentage of the house you will put as down payment. It is recommended to put at least 10% down, and if possible go for 20%. Putting down 20% means no PMI (Private Mortgage Insurance)- which is an extra cost lenders add to your monthly mortgage payment just in case you don’t make payments on your loan.
Once you have decided what percentage to put down then decide where you will be putting the money. A simple savings account will do the job, you won’t make tons of money, but it will at least be set apart from your spending money.
Cut down on some Expenses, you will be surprised how much money you can save by cutting down some non-essential expenses. Pause gym membership, eat at home, trim your clothing budget, buy generic brands at the grocery store, etc. There are several things that are not exactly necessary. It might sound like a lot to ask, but keep in mind that it is all for a good reason.
Have you been thinking about taking a nice vacation, or planning a huge party for your birthday? This is gonna be painful, but postpone those plans. Think about that moment when you will finally get to say… Home Sweet Home! It will take some sacrifice, but it will all be worth it.
Last but not least, find ways to make extra money. Look around your home and declutter, get all the clothes you haven’t worn in a while, all those electronics that are just decoration, plan a garage sale and put all the money earned into the down payment savings.
Are you crafty? A good cook? Everything you can make, start selling it and earn some extra money. Do you get a tax refund? Save it! Save all the extra money you get, the more the merrier. The more you save for your down payment, the less you will have to pay in the long run.
Remember with every good sacrifice comes a very good reward, and saving for a large down payment is worth it.
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