July 30, 2020 2 min to read
How to save for a house in 9 easy steps
Category : Finance, Home and Garden
Owning a house is everyone’s dream, but how are you going to save for this house? There are many ways you can save for a house, however, discipline is crucial.
Even if you decide to get a mortgage or a loan for a house, you’ll still have to pay a down payment in cash.
What is a down-payment?
This is the up-front money you’re supposed to pay to secure the house you want to buy.
If you decide to borrow money from a bank or other mortgage lenders, it’s a requirement that you pay 3% to 20% of the money you’ll borrow to get the loan approval.
The down payment is also necessary to secure your lender’s trust. Therefore, you’ll still have to save some money to be able to comfortably pay off the down payment when the time comes.
In addition to that, the lender will also give you the loan if your credit score satisfies him/her- That’s why it’s important to avoid having a negative credit score. He/she will also put into consideration some issues like the value of the home and your mortgage type.
Below are some simple ways you can save for a house.
But first, how much does the house cost?
Having a rough idea of how much you’re supposed to spend will give you a good head start at budgeting how you’re going to save for your future house.
Apart from the price of the house, you also need to know it’s location.
1. Open an online savings account
Saving for a house requires a lot of sacrifice and discipline because, at any moment, something can come up and force you to spend your savings.
However, technology today has made everything easy and swift. You can now save your money the smart way by simply opening an online account regardless of where you are.
First, you need to be aware of how much you make monthly and how much you plan on spending- It’s a rule of the thumb that you’re supposed to spare at least a third of your income.
Saving money online comes with a lot of benefits since you’ll earn some interest for every coin you save. The money you save, the more interest you earn.
2. Pay off your debts
You can’t start saving for down payment if you have existing debts- This includes car loans, school loans, home loans or even business loans.
Additional debt will pull you back. You’ll have to concentrate on paying out all these loans and still have enough to set aside for the down payment.
It’s true, there are some people who can handle paying all their existing loans partially. However, this will slow you down and might even spoil your credit score which…
Continue reading the article and learn more about money saving on Daisy Linden’s blog.