Struggling to save up for your dream home while renting? We understand your challenges. It’s not easy to balance out your expenses, make payments on time and attempt to save up for your dream home. Did you know that only 1 in 10 renters prefer renting to owning a home? Most people are looking to buy a home if they haven’t done so already, but the biggest challenge is saving up for the down payment.
On the bright side, real estate experts and analysts say that most renters overestimate the amount of down payment needed to buy a home. You don’t always need 20%. You can get buy a home with as little as 3% to 3.5% through different loan programs. Here, let the premier lenders at the Pacific Northwest, Peak Mortgage, help you. We serve to bring clients a reliable, hassle-free experience and help you overcome the challenge to save for your down payment.
Planning well is the first step to saving for a down payment. You need to figure out the amount you need for the kind of home you have in mind; the loan programs you are eligible for and how much to need to save to qualify for your loan. Below are a few ways to help you reach your goal.
Payoff Credit Card Debt
Any credit card debt will make it harder for you to qualify for a loan. Pay it off first before you start narrowing down ways to save up. Once you are debt free, you will have more money freed up for a down payment and a better chance of qualifying for a mortgage for two reasons:
your credit score gets boosted
your debt-to-income ratio gets lowered
These are the two big deciding factors for lenders to consider qualifying you for a loan.
Save Extra Pay
Hold on to any raise you may get or any extra income from another source. Deposit those funds into your savings account each month and continue to live off your old income. Every little saving is closer to the amount you need for your down payment. Try to save up a bit more of your regular pay if you do not have any extra income. Curb extra expenses such as eating out every day or expensive home decor. Cut costs by taking public transport or organize an office carpool.
Save Your Tax Refund
If you get a tax refund cheque from the federal government, try not to spend it. Stash it away in your savings account immediately. The sooner you put it away, the easier it is for you to resist the temptation to use it up. Your savings account can earn you interest by adjusting your tax withholding. You can also file a W-4 form with your employer to help you claim extra allowances to get less tax withheld.
Rent out to a Roommate or Airbnb
An easy and effective way to boost income is by sharing your rented space with a roommate. $500 a month is a good amount for monthly savings. If you have two extra rooms, get two roommates to double the profit.
You can also consider renting out your apartment on Airbnb if you travel frequently for work. Another alternative is to try moving into a smaller rented place to save the difference.
– Download the Airbnb app
– Take a few pictures of your apartment
– Fix a price and list it for free.
– For each confirmed reservation, you pay a 3% service fee.
If your parents live close by, you may want to consider moving back with them if it is convenient. Offer to pay for groceries or utility services to help them out instead. Your savings will grow rapidly if you take such steps and very shortly, you could have enough for a down payment for your dream home.
Call Peak Mortgage Co. to Help You With Down Payment
If you are seeking to buy your dream home, give us a call. We have decades of experience and a team of trusted mortgage professionals who are ready to assist you at any one of our conveniently located branches.