Before you can make the transition from renting your home to owning your home, you will need to have a down payment, typically 3 to 20 percent of the home’s value. George Mason Mortgage suggests the following tips to help save for it:
1. Develop a budget & timeline.
Start by determining how much you’ll need for a down payment. Create a budget and calculate how much you can realistically save each month – that will help you gauge when you’ll be ready to transition from renter to homeowner. If you need help to decide what your down payment would be, contact one of our Loan Officers for assistance. The earlier you speak to a professional, the better set for success you will be.
2. Establish a separate savings account.
It’s a good idea to check rates for your car insurance, renter’s insurance, health insurance, cable, Internet or cell phone plan. There may be deals or promotions available that allow you to save hundreds of dollars by adjusting your contracts.
3. Shop around to reduce major monthly expenses.
It’s a good idea to check rates for your car insurance, renter’s insurance, health insurance, cable, Internet or cell phone plan. There may be deals or promotions available that allow you to save hundreds of dollars by adjusting your contracts.
4. Monitor your spending.
With online banking, keeping an eye on your spending is easier than ever. Track where most of your discretionary income is going. Identify areas where you could cut back (e.g. nice meals out, vacations, etc.) and instead put that money into savings.
5. Look into state and local home-buying programs.
Many states, counties and local governments operate programs for first-time homebuyers. Some programs offer housing discounts, while others provide down payment loans or grants. Contact us to learn more about these programs and what might be available to you.
6. Speak with a professional.
If you’re planning to buy a home in the future but feel financially ready, talk to a professional. Meet with them face-to-face, provide them with all of your financial documentation, let them run a copy of your credit report, and go through a pre-home buying consultation so they can tell you what to do to become pre-qualified in the future.
Many times, potential buyers are not ready, but having a conversation with a professional—so you know where you stand and where you are going—can be tremendously beneficial.
