Saving for a Down Payment

Homeownership is a dream many aspire to obtain. According to Realtor. com, the list of best housing markets for first-time buyers depends on a few different factors. The average selling price of a home, popularity of the local market, available inventory, total time a home is listed and employment availability in the area influence whether a city is a good place for buyers to flock. Some of the best cities you can purchase a home are:

  • Fort Worth-Arlington, Texas
  • Dallas, Texas
  • Raleigh, North Carolina

If you currently live in one of these regions and have been interested in purchasing a home, the time to do so may be now. Follow these tips to help save for a down payment on your dream home:

Determine How Much You Want to Save

The rule of thumb has historically been to provide 20 percent of the value of the home as a down payment. However, government-sponsored enterprises and programs allow qualified homeowners to supply as little as 3 percent as a down payment. Reach out to a lender to help you determine what type of loan is best for you and your financial situation. This can help you figure out how much you should save. While a lower down payment may seem appealing initially, paying more up front can help you lock in a lower interest rate and avoid having to pay private mortgage insurance – saving you more money in the long run. So try saving as much as you can to give to a seller up front. This will also help decrease the likelihood of spending more money on a home than you otherwise would with a sufficient down payment.

Establish a Plan

Once you have figured out exactly how much you want to save, create a plan. Know where you can tighten your belt and whether you can afford to take on a few more hours at work or even get an additional job. Consider turning a hobby into income by selling work online or offering tutoring lessons for a small fee. Write down exactly what you intend to do and how much money you should have saved over the course of each month. By holding yourself accountable, you are more likely to reach your goal and successfully save enough for a down payment on a new home.

Automatically Deposit Money

According to Zillow, an online real estate company, you may want to automatically deduct a certain amount of money from your paycheck each period and have it placed in a designated savings account. Even cutting your income down by 2 percent can go unnoticed by you, and you will be saving money for a new home. This can ensure you will not be tempted to spend money and your designated down payment cash stays where it is supposed to. You will reach your goal more quickly by setting up automatic withdrawals.

Reduce Spending

Cutting out extra expenses is an obvious way to help save for a down payment. However, knowing where to cut corners can be a bit more difficult. Daily Finance suggested you stop buying new clothing, shoes or coffee shop drinks. “Keep in mind when you’re in super-saver mode to ask yourself out loud, ‘Do I need this or want it?’ before you buy anything,” said Anna Behnam, an Ameriprise financial advisor, according to Daily Finance. Also, consider downgrading and moving to a smaller apartment to save on rent. Store extra items at a local storage facility.

If you are living in one of the top cities for buying a new home, SecurCare Self Storage has several Texas self-storage facilities and Raleigh, NC storage facilities, which are conveniently located. So, stop by today!