Saving for a Down Payment

Finding a new home and saving for a down payment is no small task, talk to the professionals at Professional Mortgage Solutions in Rego park, NY for advice to get started. Buying and owning a home requires budgeting skills from the start. Many can save on loan rates if you are able to provide a large down payment, or at least 20%. Plus, you will have a little equity in the home as you get started.

How Much Down Payment Will I Need?

It is always best to put as much down payment as as you can, however, many financing sources have their own requirements.  You can review each program with Professional Mortgage Solutions to see what will be required to get a good loan rate and term approval. Below are other lower down payment programs to consider, remember these come with their own strict home requirements:

  • FHA Loans—loans backed by the Federal Housing Administration (FHA) may offer mortgages to first time home buyers with down payments as low as 3.5%.
  • VA Loans—eligible service-members may qualify for a mortgage with zero down payment.
  • USDA Loans—if you purchase a home in a qualifying area, you may have a very low down payment.

Ways to Save for a Down Payment

Even if you get a zero or low interest loan approved, you still need to save money in the case you need repairs in your home. You will have a lot of ongoing expenses. Below are some ways to save for either your down payment or home ownership costs:

1) Many open a separate savings account and direct a portion of their paycheck or second job to go directly into the account. Once you gather a good portion, you can move the money into a higher rate of return account, such as a certificate of deposit.

2) Others work to refinance any debt they have so that they can pay it off faster. You will not get a good loan rate approved if you carry too much debt, so consider paying it all off first. Note with some programs, student debt will be considered differently.

3) Some people also do a round up savings account and place the change from their expenses into savings. This is a good trick for those who are not good at prioritizing their savings.

4) Many will need to prebudget their expenses, and track them closely, cutting back on non-essential spending, such as meals out, vacations, eating out, new clothes, etc.

5) If you have paid off your car, keep it and do not buy a new one. Look for any way you can to cut down on monthly bills, such as credit cards, utilities, cell phones, and automotive expenses.

Professional Mortgage Solutions helps homebuyers save up for down payments and find great financing programs for new homes. Contact our team in Rego Park, NY for assistance today!