Todd Finn - RE/MAX Partners



Posted by Todd Finn on 11/26/2017

Saving for a down payment on a home is a long process that requires discipline and organization. But we all know that with so many other things going on in our lives it can be hard to spend enough time focusing on your budget.

Fortunately, there are several tools available to soon-to-be homeowners who want to keep track of their spending and make sure they meet their down payment goals. In this article, we’re going to talk about some of the best budgeting apps, websites, and other tools to help you keep yourself accountable so you can be living in your new home as soon as possible.

Why budget for a down payment?

If you’ve saved money in the past for a purchase without a budget you might be wondering why you should go through the effort of creating one now.

However, there are many reasons to have a budget, especially if you’re planning on making an investment as large as a home. Here are just a few:

  • Keeping an accurate budget will let you know almost exactly how much you can expect to save for a down payment

  • Budgeting helps you locate and cut out expenses that would be better used in your savings account

  • Budgeting will give you peace of mind along the road to saving for your down payment

Now that we’ve talked about the importance of making a budget, let’s talk about some of the best ways to get it done.

YNAB

You Need a Budget, often shortened to YNAB, is one of the most useful tools for learning about and creating a budget. I don’t know about you, but I was never formally taught how to budget in school. But, it would have been a useful class to have!

YNAB combines budgeting tools with educational materials to help you save while you learn more about managing money. It can be easy to feel lost when it comes to learning about personal finance--that’s what makes YNAB so great.

Their basic precept is that you “give every dollar a job,” meaning there won’t be any money in any of your accounts or in your paycheck that doesn’t have a purpose. That doesn’t mean you can’t spend money on yourself every once in awhile, just that you’ll have planned ahead for moments so you can manage them.

You Need A Budget is available for Apple, Android, on Alexa and in your browser.

Saving with your spouse

Planning a budget yourself is complicated as it is. But planning together with a spouse can be even more confusing. However, there are ways to effectively make a family budget to save for a down payment.

First, you should both make sure you have individual budgets to make sure you know how much money from each of your incomes can go into savings. Opening a joint savings account and having a certain percentage of your paycheck direct deposited into that account is a good place to start.


From there, monitor your savings for a month to see if you need to alter this number, and try to stick to your monthly savings goal.




Tags: down payment   budgeting  
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Posted by Todd Finn on 10/8/2017

A new house is within reach if you find a lender who doesn't require a down payment or you to secure a mortgage. But, that's probably not the type of lender you want. A quality lender will check your credit history, background, work history and ask how much you're ready to put toward your down payment.

How you could put 20 percent or more down on a new house

It's recommended that your down payment be at least 20 percent of the total cost of your new house. Add in the fact that the average price on a house in the United States exceeds $300,000 and you're left to find a way to raise $60,000 or more.For many Americans, that's equal to an annual salary or more.

As impossible as it may seem, you can raise enough money to put down on a new house.It may call for a short term sacrifice as it regards your living arrangements. You might have to live with your parents for a year or longer.

Another sacrifice that you may have to make regards entertainment and clothes. Instead of buying live concert tickets, stream concerts live on your computer. Hand wash delicate clothes, so that you can wear the fashions until you've raised the down payment.

Get serious about saving for a down payment

Make saving a down payment for a new house a priority. More actions that you could take to save your down payment are to:

  • Cut your commuting costs - Try carpooling. You can also sign up for commuter savings programs through your employer. Heavily trafficked business areas might operate separate commuter savings programs. Your local Chamber of Commerce or the mayor's office may be a good first contact to learn more about these savings programs.
  • Hold yard sales and deposit all proceeds from the yard sales into a savings account that goes solely toward your down  payment.
  • Offer to take on extra projects at work. Put all of your overtime pay in the savings account.
  • Pay off credit cards. If you don't pay credit cards off completely, start paying them down to reduce your monthly minimums.Put this extra money toward your down payment.
  • Perform seasonal work. Types of seasonal employment includes mowing lawns, shoveling snow and preparing and taxes. If you prepare taxes make sure that you are licensed. You could also work with large, established tax firms.

Find out how much it cost to pay rent for a studio or one bedroom apartment where you live. Put this money into your savings account. Also, give some of the money to your parents as a show of appreciation.

After you save 15 percent of the down payment, meet with lenders. Ask them what type of interest rates they are willing to give you on a new house. Stick to your savings plan until you reach at least 20 percent on the average price of a home in your area.




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