Most people find it very hard to save enough money to buy a house. However, with a good effort and a solid saving plan, anyone can be able to save enough money for a down payment on the home they wish to buy.
We link up with an expert to give us a few tips on how we can save money when building a home. Anthony Wardan is a director at maple living and has run a business with a team of qualified professionals completing homes to the highest standards.
Research home prices
Before you start saving, you need to figure out how much your ideal house cost and factor potential increase in price too. You can research on your own or do it together with an expert.
Determine how much to save for your down payment
Most people believe they can’t buy a new house because they think they can’t afford a 20% down payment. Many lenders no longer require a 20% down payment so adequate research will solve this issue. In fact, with a good credit score and income, you may get a loan with a little as a 3% down payment.
Check if you qualify for a government loan
The US government offers different types of home loans that require lower down payments than private companies, plus a better interest rate. The three types of government-backed mortgages:
The federal housing administration requires a 3.5% down payment and 580 credit score. If you have a credit score of 500 you will need a 10% down payment.
A Veterans Affairs mortgage is only for people who are affiliated with the United States military. You may not need a down payment at all.
The United States Department of Agriculture provides mortgages for low-to-moderate-income earners who are buying houses in a rural area. You don’t need a down payment if you qualify for a USDA mortgage.
Government loans are the best option if you qualify because you will be able to buy a house sooner with a lower down payment, suggested Anthony Wardan.
Build a better budget
The first step in saving is budgeting. You need to know where your money goes every month and try to cut it in the best way possible.
First, check your bank statements and credit card payments. Look at where you are spending the most money. Note down the necessities like rent and utilities. Consider how much you spend on unimportant things like entertainment, restaurants, etc. Cut them down to as little as possible. A budgeting app can help you automate this process.
Make sure you stick to cutting down on your expenses and put the money on separate savings from your everyday use bank account.
Look for other employment options
Switching your job to a higher-paying one can help you save a lot of money.
Browse online on the different job posting sites and compare your salary to see if you are making the same money as people who do the same job as you or hold the same position as you.
If you discover you aren’t being paid enough like your peers, use your findings as leverage for you to ask for a raise or promotion in your place of work. Also, picking up a side hustle can help you save money. Side hustles like freelance work, driving for a ride-sharing company, pet sitting or walking can put more money in your pocket.
Even though it can be challenging to save money for a new house, with determination, hard work, and perseverance it is achievable.