How to Save For a House Down Payment
Thanks to the subprime mortgage mess, no down payment homes are a thing of the past.
Actually this is great news for potential homebuyers as it shows that lenders are taking a bit more responsibility by offering less risky mortgages.
Despite that silver lining, those interested in buying a house and taking advantage of the historically low interest rates need to have a lump of cash to begin the house buying process.
Those thinking about taking the plunge should start working towards building the down payment nest egg now.
Banks favor consumers who invest their own money into buying a home as it the act helps prove that buyers have vested interest in the purchase.
There are additional perks to making a large down payment on a home.
Lenders may offer you bet interest rates (that can save thousands of dollars over the life of the loan), mortgage insurance cost will be lower (as you will have a smaller debt to cover) and you will already have some much-needed equity in your home.
Coming up with the large chunk of change is not an easy task.
However there are some creative ways you can get the money you need to buy your castle including:
Actually this is great news for potential homebuyers as it shows that lenders are taking a bit more responsibility by offering less risky mortgages.
Despite that silver lining, those interested in buying a house and taking advantage of the historically low interest rates need to have a lump of cash to begin the house buying process.
Those thinking about taking the plunge should start working towards building the down payment nest egg now.
Banks favor consumers who invest their own money into buying a home as it the act helps prove that buyers have vested interest in the purchase.
There are additional perks to making a large down payment on a home.
Lenders may offer you bet interest rates (that can save thousands of dollars over the life of the loan), mortgage insurance cost will be lower (as you will have a smaller debt to cover) and you will already have some much-needed equity in your home.
Coming up with the large chunk of change is not an easy task.
However there are some creative ways you can get the money you need to buy your castle including:
- Save Your Change: Small change can add up to big savings.
Stuffing your piggy banks daily with loss pocket change or stashing away ever $5 bill you receive in change can add up to big bucks in very little time. - Borrow from Uncle Sam: Although they are not advertised, both state and local governments may have programs to assist those in need to secure the money needed for a down payment.
- Bank of Mom: Parents wanting the best for their children may be more then willing to loan junior the required funds for a down payment.
Taking advantage of their generosity is not cool, so make sure you pay them back or it may be the last time they throw you a financial bone. - Bank Your Tax Refunds: The average 2010 tax refund was over $3,000.
Saving those for a couple of years while earning compounding interest may be just the thing you need to finance your purchase.
