Before buying a house you will need enough down payment/closing costs to qualify for a mortgage. The Optimum down payment is 20% of the sales price, which allows you to forgo Mortgage Insurance.
It can, however, be hard for first-time buyers to save that much. Here are a few easy ways to save for a down payment:
Determine your time frame
When do you plan on purchasing a home? In 2,3 or 4 years? The shorter your time frame, the higher your annual savings will need to be.
Automate a savings plan
The more convenient you make it to save, the most likely you will be to actually save. You can either chose a fixed amount, 300$ for example, or a percentage of your paycheck so you will save more if you get a bonus or a raise!
Tap into other savings account
First-time buyers can withdraw up to $10.000 from their IRA (Individual Retirement Account) to put toward the down payment. If you are married, that means you can each withdraw $10.000. You can also take a loan out from your 401K in which you pay your self back with interest, this is a Win-Win in many cases.
There are many programs that allow first time home buyers to get into a home with minimum Down Payment and Closing Costs. Don’t hesitate to contact us if you would like more information.