Much like it is any time you get a loan, a specific amount of money is required as a down payment that goes towards the purchase. When buying a home, it’s no different.
Whether it’s you’re a first-time buyer or it’s a Burlington second mortgage you’re looking for, if you’re interested in purchasing a home then you know you are going to have to come up with some cash for a down payment.
However, the following 3 tips aren’t limited to saving for a home. Apply the following tips to any large purchase, paying off debts or saving for the future.
- Find what’s most important to you
One of the first steps to a long process of saving for a home is identifying what is most important to you in your life in terms of financial spending.
Getting in the mindset of saving money wherever you can is an important step. For example, make a pot of coffee at home instead of buying that coffee every morning for five days a week, or make a dinner at home instead of going out.
Create a list of what you are currently spending your money on each day. By doing this, you can then identify what is important enough to keep spending money on and where you can potentially cut back and put towards a home.
- Increase the amount you save each month
This one ties into Tip #1 in a way. If possible, set aside a bit more money each month than what you are currently saving. For example, an extra $10 a month will go a long way in the end. Or, if you get a work bonus, put that directly into your savings account and continue as if it wasn’t there. You’ll be surprised at how much you can save by doing this.
- Pay off credit cards
Before you start saving away your money, make sure you’re as debt-free as you can be by paying off your credit card balances. As you know, you are paying interest each month for every month you have a balance on your credit cards. By having no balance on your cards, you will free yourself of having to pay interest charges when you can be putting that extra money towards your big purchase.
Additionally, lenders won’t like it if you have had a high balance on your credit cards for a long period of time. The faster you can pay off your credit card debts, the better of you’ll be in the long run.
By keeping these three tips in mind when saving for a down payment on a home (or any major purpose for that matter), you can significantly increase the amount you have at your disposal in the end.
If you’re considering buying a home – whether you’re new to buying or seeking a Burlington second mortgage – and will be applying for a mortgage loan, contact our team today and find out how we can help with the process!