4 Tips To Save For Your Down Payment

There are many factors to consider when trying to save for a down payment. Calculating how much you're going to need, determining how much you have already and making a plan to save more can help with the process. These tips will help you get organized as you save for a down payment to buy a home, whether that's in Glenbow, or anywhere else.

Decide How Much You'll Need

The amount of money you'll need for a down payment will depend on how much the home will cost. To decide how much you want to spend, talk to lenders and attend open houses. A lender can help you decide how much monthly payments will cost for homes in each price range. Visiting open houses can help you decide what types of homes will best meet your needs.

The minimum amount down for homes over $500,000 is 5 percent of the purchase price. If the purchase price is over $500,000, the down payment is 5 percent of the first 500,000 and 10 percent of the amount over $500,000. Once you've decided on an outside maximum that you plan to spend, then you'll know the maximum amount that you need to save. Having a target down payment amount in mind can help you set goals and determine how long you'll need before you're ready to buy a house.

Know How Much Money You Have Already

Count up the money from all of your savings accounts and investments. Add this together plus interest to determine how much money will be in your accounts when you're ready to buy a home.

Don't Forget To Budget For Other Major Expenses

Don't forget that the down payment is not the only major expense that you'll be faced with when it's time to buy a home. Many home buyers have to make repairs to their new property before they can move in. Having money for repairs, the move and other expenses can help make the experience of buying a home less stressful. Many sources say that you should plan to spend around 1 percent (or more) of the purchase price of the home in repairs and maintenance per year. Budgeting for this money while you're saving for the down payment will help ensure that you really do have all the money you need to buy a home.

Set a Purchase Date Goal

Decide when you'd like to buy a home, then divide the amount you'll need to save by the number of months until you'll be buying. This is how much you'll need to save each month. Making a budget and can help you cut corners and meet your savings goals. Ways to save money include:

• Make your own food from scratch instead of buying pre-prepared dishes.
• Set strict limits on the amount that you can spend on entertainment and gifts.
• Plan to stay closer to home for vacation.
• Make gifts instead of buying gifts.
• Repair clothes and shoes instead of buying more.

Many home buyers take this time to get a second job and sell some unwanted household items.

Work With A Real Estate Professional

During this time, your real estate professional can help you determine what kind of house works for you. To get started looking for homes, contact a reputable real estate agent in your area.