While all of these low-down-payment/no-down-payment options can make homebuying more accessible, it’s still a good idea to have some savings you can bring to the table. Having some cash on hand is also helpful in covering closing costs, any work your property may need, or unforeseen expenses that may come along. Here are several suggestions to help build the size of your cash reserves.Set Up A Forced Savings Plan:

Set up a separate banking account and deposit a set amount intoit every month. This works best if you do it through an automatic deduction. If you don’t see the money, you’re less likely to spend it. Contact your banker or Credit Union officer to discuss setting up a direct deposit account.

  • Skip Or Downsize Luxuries For A Year: Start small and stick with it. Things you might not necessarily think of as luxuries can really add up in terms of dollars saved. For instance, if you usually buy lunch every day try “brown bagging” a few days a week. If your family has gotten used to eating out at least once a week, try cutting back to just a couple of times a month. On the “big ticket” side, you might consider a less expensive car than you might otherwise buy or a lower-cost vacation than you might normally take.
    Pay Off Credit Cards: Big credit card balances don’t do you any favors on credit reports or when qualifying for a loan. They can make you appear overextended. They can also put a huge burden on your savings efforts. Always start by paying off the cards with the highest interest rates, even before the ones with lower balances. And you don’t have to completely get rid of your credit cards. You just need to be careful about using them. Credit cards used smartly are actually signs of a financially responsible and creditworthy borrower.
    Certificates Of Deposit (CD): Certificates of deposit are a convenient, low-risk method of saving. But when rates are low, committing to a few long-range CDs isn’t a good idea. Get several shorter-term CDs of varying ranges, instead. That way, you can adjust or “ladder” your CD choices to take quick advantage of movements in interest rates. Your financial planner, banker or credit union representative can help you learn about the choices available.
  • Sell Unwanted Items: Chances are good that an in-depth search of your current home will turn up quite a few items you rarely use and/or simply don’t even want to keep. Sell all that stuff and put the proceeds straight into your down payment fund.
    Earn Some Extra Income: Look for a part-time job that you can do without interfering with regular employment. Try an evening job in retail, party-oriented sales, or a seasonal job. Some of these part-time positions may even offer dependable employees insurance options or discounts that make the job more attractive. The key here is discipline, so that your extra income goes directly into your down payment fund and not into taking advantage of your employee discount at every opportunity.
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