5 ways to save for down payment for first home
Thinking about buying your first house? Then, the first thing to do is to save for a down payment.
07:57 19 June 2013
The first step that you need to take when buying your first home is to save for the down payment. Ideally, you would want to save 20per cent of the total price, as this will increase your chances of getting your mortgage loan approved. This will also help you lower down your monthly repayments and interest rate.
Below are 5 ways to save for a down payment:
- Set goal. The first thing to do is to know how much money you need to save within a specific time frame. Do you want to save at least £5,000 per year? By doing so, you can easily figure out how much money to set aside per month.
- Create a budget. Most people are clueless on where their money are going. Month after month, they find themselves living from paycheck to paycheck making the process of saving money a bit impossible. To avoid this from happening, create a budget and stick to it. Make a list of your expenses and identify those that you can live without so you can save.
- Cut your spending. List all the things that you spend money on. Then, determine if they are needs or wants. Then, forego some of the things that fall under the “wants” category.
- Make more money. Find ways on how you can earn extra income. Your choices include getting a second job, doing freelance work every now and then, etc.
- Open a separate savings account. This will help you easily know how you’re doing and if you’re on track to save the amount you need within a specific time frame.