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Posted by Bilazarian Group on 8/9/2018

Youíve been thinking it for a while: ďI really should start putting some money aside for a down payment.Ē But, you just canít seem to find any wiggle room in your budget.

Youíre not alone. Saving for a down payment isnít easy. Especially if youíve got rent, car payments, student loans, and are trying to put money aside for retirement.

In todayís post, weíre going to talk about how to make a game plan for your down payment. This way, you can start saving immediately, bringing you closer to your goal of homeownership each day.

Step 1: Give each dollar a job

The first rule of budgeting is that you need to know where each dollar you earn ends up. From there, you can start re-allocating funds to the things you want to save for.

There are many apps and tools available to help you out with this process, including YNAB (You Need A Budget) and Mint. If apps arenít your thing, you can always use a simple spreadsheet.

First, account for all of your income. This could include your salary, rental income, or other forms of money that you have coming in.

Next, detail each of your weekly and monthly expenses. Everything from groceries to the internet bill and retirement contributions.

Step 2: Reassess your expenses

Now itís time to make some tough decisions. Are there ways you can cut down on your weekly or monthly expenses? Maybe you arenít using that Amazon Prime membership as much as you thought you would. Or, maybe youíve decided you donít really watch anything on cable but the news. There are a number of ways one might cut back on their monthly bills.

Get creative with family plans, bulk shopping for food, or cooking budget-friendly meals. All of these savings will add up quickly.

Step 3: Pay off small debts with high interest

Letís face it, if you have thousands of dollars in student loans, you might not be able to aggressively pay them down by the time you want to move out of your apartment.

But, for small debts (under $1,000 credit card debt, for example), you could save more in the long run by paying them off and avoiding interest payments.

Step 4: Be smart about your savings

With the right savings account and credit card, you can earn money through savings interest and through cashback rewards on credit cards.

First, find a savings account with the highest possible interest rate. These can often be found from choosing an online bank who doesnít have the overhead of running branches.

Next, direct deposit a set amount of your paycheck each week into that savings account. This way, you can be sure that you wonít dip into your down payment savings.

To generate additional income, you can use cash back rewards from credit cards for things like groceries and gas. Choose a credit card that offers the best cash back rewards for things like groceries and gas purchases. The key here is to only use your credit card on necessities and to always pay off the card in full at the end of each month.

If you follow these four steps, you should be able to streamline your down payment savings process and start saving right now.




Categories: Uncategorized  


Posted by Bilazarian Group on 3/8/2018

If youíre hoping to buy a house in the near future, youíll want to focus on saving for a down payment.

Down payments are a way to let a lender know that you are a low-risk investment, and a way to save money on interest over the term of your loan.

If you have your other finances in order--a good credit score and stable income--thereís a good chance that making a 20% or more down payment will land you a low interest rate that can save you thousands while you pay off your loan.

How large should my down payment be?

The larger the down payment you can afford, the more money youíll likely save in the long run. While there are ways to get a loan with no or very small down payments, these arenít always ideal.

First, if you put less than 20% down on your home loan, youíll be required to pay private mortgage insurance, or PMI. These are monthly payments that you make in addition to the interest that is accrued on your loan.

So, if you donít put any money down on your home, youíll accrue more interest over your term length and youíll pay PMI on top of that.

What affects your minimum down payment amount?

Lenders take a number of factors into consideration when determining your risk. If youíre eligible for a first-time home owners loan, a veteranís loan, or a USDA loan, your loan can be guaranteed by the government. This means you can likely pay a lower down payment while still receiving a reasonable interest rate.

When applying for a mortgage, be sure to reach out to multiple lenders and shop around for the rates that work for you. Many lenders use slightly different criteria to determine your eligibility to pay a lower down payment.

Other things that affect your minimum down payment include:

  • Credit score

  • Location of the home you want to buy

  • Value of the mortgage

Saving for a down payment

Youíll get the most value out of your mortgage if you put more money down. However, if youíre currently living in a high-rent area, it could mean that itís in your best interest to get out of your apartment and start building equity in the form of homeownership.

If you want to buy a home within the next year or two, there are a few ways you can help increase your savings.

First, determine how much you need to save. Depending on your housing needs and the current market, everyone will have different requirements. Do some home shopping in your area online and look for homes that are within your spending limits. Remember that you shouldnít spend more than 30% of your monthly income on housing (mortgage, property taxes, etc.)

Next, find out what a 20% down payment on that home would be, adjusting for inflation.

Once you have the amount you need to save, remember to leave yourself enough of an emergency fund in your savings account to last you a month or two.




Tags: Mortgage   down payment  
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