Friday, January 13, 2012

How Do I Save for a Down Payment?

You have made the choice that in 2012 you are going to join the ranks of Home Owners. You are on the right track, but you want to have more money saved, both for the purchase, but also to have money left over for those "just in case" moments. You also want to make sure you can handle the new payment on your home. How do you get there? Sometimes it is easier than others to save. Tax time is coming and if you are going to get money back from the government, that is a great way to kick off your savings account. But what other ways can you save money. As an example if the price bracket you are looking in has an example payment of $1200 per month, but currently you are only paying $900 in rent. I would recommend taking $300 each month and putting it into a savings account. If you can do this and not have to touch that money for at least 6 months, then that new payment will not be a problem for you. You have been making the new payment for six months and you $1800 in savings. Also, the lender can see that even though your rent is only $900, that in fact you have been saving the equivalent of your payment, a great compensating factor for qualification.
Another great way to save is what Oprah calls the "Latte Factor." Do you go to Starbucks everyday? Maybe you aren't a Starbucks person, but there is something you spend money on everyday or several times per week that if you cut down or cut out, you could be saving. Write down everything, and I do mean everything, you spend money on every day for a week. Then see what you can do to stop spending the extras. Are you going out to eat a lot, at lunch or dinner. Think about bringing your lunch to work or cooking at home more often. Both of these options will benefit you more than just in the pocket book. Eating food you prepare at home is not only less expensive it is healthier. You may be able to achieve two Resolutions with one step. For more ideas email or call me. Let's get you on the road to home ownership in 2012.

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