Are you tired of renting, and interested in purchasing your own home? Figuring out how to save money for a down payment is one of the largest challenges that home buyers face; it may take some time, but there are several steps you can take in order to make your dream of owning a home a reality. If you are interested in buying a home, and want to learn more about how to save money for a down payment, Foundation Mortgage can help guide you through the process. We serve clients in Knoxville, Maryville, Lenoir City, Oak Ridge, and Gatlinburg, Tennessee, contact us today for a consultation.
How Will I Need For a Down Payment?
Before you begin saving for a down payment, you will first want to talk with a lender to figure out how much of a mortgage you are able to qualify for and how much you need to save. The higher your down payment is, the lower your total loan amount and your monthly mortgage payments will be, and the more money you will be able to save in the long run. Paying a 20% down payment is typically ideal, because if you are able to put down that amount, you will not be required to pay private mortgage insurance. Do not worry if you are unable to put down 20%, however, there are several other financing options that can help you secure your home. Certain conventional loans allow you to buy a home with anywhere from a 3% to a 15% down payment. There are also nonconventional loans that are insured through the government that require a low down payment, such as FHA loans or USDA loans, and VA loans intended for qualified military service members have a zero down payment.
Tips For Saving Down Payment Funds
Even though saving for a down payment may seem overwhelming, there are several steps you can take in order to reach your goal of buying a home. Some tips for saving for a down payment include:
- Set up a savings account, preferably with a good interest rate, and dedicate a specific amount of money each month to be automatically transferred from your income.
- Lower your expenses – try to cut back on eating meals out, vacationing, clothing, etc.
- Try to earn some additional income with a second job, and put that money into a savings account
- Try to pay off any debts from credit cards, etc. in order to avoid paying interest
Getting Help Saving For a Down Payment
Buying a home can be costly and it can take some time to save for a down payment, but it is a valuable and rewarding investment. If you are taking the exciting first steps of saving for a down payment and buying a home in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, Foundation Mortgage is here to help. Contact us today to begin the process of owning your dream home.