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| Getting Serious about Saving for a Down PaymentSaving for a down payment and closing costs for a home purchase can seem like a daunting task. Here are some tips: Put your plan on a calendar and break it into chunks. If you want to buy by a year from now, that gives you 12 months to save. Map out such things as tax return estimates, bonuses from work, and other lump sums you might be lucky enough to have coming your way. Then look at how much more you’ll need. Let’s say you’ll be short by $20,000. If you want to buy in one year, you’ll need to save an extra $1,660/mo. on top of your lump sums. Stretch that to two years, and you’ll need to save an extra $833/mo. If you already make that much extra over your normal living expenses, then it will be relatively easy to save what you need. You can automate your savings and it’ll happen effortlessly. However, if you don’t have extra money laying around, you’ll need to get creative. That can mean many things, including… ● Buying a much cheaper property. ● Using a down payment assistance program if one is available and you qualify. ● Making an additional income from a second job or side hustle. ● Borrowing from a relative at least six months before you apply for a mortgage, so the money is “seasoned” in your account. ● Discussing with me how to structure an offer that includes the seller paying some of your closing costs. ● Reducing your retirement deductions from work temporarily while you save what you need. Gambling, day trading, and winning the lottery are not effective strategies. |