If you rent a house, you’re paying someone else’s mortgage. If you rent an apartment, you’re just filling another investor’s pocket with cash. Buying a home is a great way to spend money on your housing that actually builds equity for your future. It’s not only a home that you own, but it’s also an investment.
You may want to own a home, but simply can’t afford to buy right now. You’re not alone. A recent survey by a personal banking firm reported that one in five Americans don’t have a savings account. A significant portion of those that do have accounts don’t have a balance in them. In SoCal, coming up with 10% to 20% down for a home may seem daunting, but it’s not impossible. Here are five tips to help you save for a down payment:
1. Set a target goal. Talk to a mortgage professional, who can assist with your pre-approval. A pre-approval shows you how much you can afford and how much you need to save for a down payment. People who have specific goals in mind have a better success rate.
2. Assess your spending habits. Don’t just make a rough audit of your monthly rent, utilities, insurance, and grocery costs. Look into your monthly bank and credit statements to see where your money is going.
3. Unload your stuff. This can be done locally or online. Even niche items can be sold locally or online with services like Craigslist or eBay. You might not be sitting on a fortune, but in combination with your savings, it will make a difference.
4. Downsize your apartment. Moving from a 3-bedroom to a 2-bedroom can save lots of cash without sacrificing too much space. It can also help you purge more unnecessary belongings. The smaller space creates lower heating and cooling bills, too.
5. Save your tax refund. This can be a nice chunk of change, depending on your work. If you can commit to socking away your tax refund, it will be easier not to spend it when the check shows up. You usually collect that tax refund between February and April.
“Homeownership is a wise investment.”
If you have any questions for me about saving or about real estate in general, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.
