How Do I Save Money For A Mortgage
In order to acquire a mortgage loan to finance the purchase of a property, you need to have sufficient cash to pay for the down payment. The usual rule has been a minimum of 10 percent of the property purchase price as a down payment.
Although the dollar value of a down payment is relatively high, obtaining the funds for it is not beyond reach. It you are determined enough to get what you want, you most likely will.
With determination comes motivation for you to save, limited only by the size of your paycheck and your dreams.
Make one savings account your “Down Payment Goal” and any extra cash, coins, money from presents, raises, taxes, part-time jobs, paid off debts, etc. go directly into that account.
One good way to put money aside is never to see it. You can have it automatically transferred to your ’special’ account. You will be certain that you will not be tempted to spend it and not physically have to deal with it.
Make your money work harder for you. Put your money into a certificate with a higher interest yield. Also, if you have been paying monthly installments for your car loan, credit cards or your education loan and have paid off one of these loans, now pay yourself.
You will be living on the same funds, so now the money from the old bill can go right into your “Down Payment Goal” account without missing it.
There are other options if you do not have money for a down payment. Today is a frustrating time for people trying to purchase a home.
There are strategies for people who have money saved for down payments and other strategies for people who are practically broke. There are so many plans now that have been developed; we shall only mention a few.
No down payment loans have the disadvantage of requiring costly mortgage insurance. You can avoid this by getting a “piggyback loan”: a home equity loan that piggybacks on top of a primary mortgage.
The payment on the second mortgage equals the cost of the mortgage insurance and the buyer can deduct the interest on their income taxes.
Another program is the Home Solution program where the seller contributes 3 percent for the down payment. The home’s seller “donates” 3 percent of the home’s sale price to the nonprofit program, plus a fee.
The nonprofit program then gives the buyer that 3 percent at closing, (used as a money gift which is accepted by the Federal Housing Administration) with the money serving as the down payment.
So, if there is a will there is truly a way.
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