Based on which loan program you choose, an important prerequisite to buying a home is saving up for a down payment.
While some home loans do not require substantial cash up-front, a down payment can go a long way toward getting approved and reducing additional fees.
As you apply for a mortgage, demonstrating your worthiness for the loan, which includes your credit rating, debt-to-income ratio and more, comes into play.
If saving up for a down payment seems out of reach, consider some of these tips.
Pay off credit cards
Getting ahead is possible by not being behind on credit payments.
Try to pay off your credit as soon as possible to increase your cash flow, and prepare for your home application. Your credit standing will go a long way toward your mortgage application. So, saying goodbye to your credit bills is the ultimate two-for-one in homebuying.
Put large purchases on hold
Online window shopping can quickly turn into impulsive purchases – especially with free next-day delivery.
Be disciplined and hold off on any unneeded or larger purchases until after you’ve settled into your new address.
At the very least, take your time before making purchases. The time you spend thinking will allow you to evaluate your options, find better deals or perhaps decide to put off the purchase altogether.
Cut the cord
Cable packages can be expensive, especially if they are bundled with high-speed internet.
Look for ways to save by editing your channel lineup, or making the switch by cutting the cord.
Streaming services may provide a more economical way to enjoy your favorite shows, sports and live TV.
Make saving money as easy as checking your smartphone.
An array of money-saving apps, such as those that focus on coupons or automatic transfers, make it easier than ever to grow that financial cushion.
Not sure where to start? A simple app search is a good start. Keep an eye out for rewards programs, money-back opportunities and any other deal that puts money back into your wallet. Apps can also help you adjust spending by tracking it via a budget.
Remember, not all mortgage programs are created equal and some require no to little down payment, but saving money is a major leg up. Even if the money is not needed entirely for a down payment, the money can come into use once you are ready to move in.