When you’re ready to buy a home, one of the biggest hurdles is gathering the funds for your down payment, closing costs, and other expenses. While there are some low down-payment options available, most lenders prefer buyers to put down at least 20% of the closing cost. You’ll also have to pay for inspections and title insurance and still have enough left over to make any repairs or renovations once you move in. While saving this much may seem like a daunting task, a little fiscal discipline and a sound plan can help you collect the funds you need in one year.
3 Tips for Saving Money to Buy a Home
1. Open a Dedicated Savings Account
The first step is to open a savings account dedicated solely to buying a home, and set up automatic transfers. If your home purchasing funds are separated from the rest of your money, you’ll be less likely to spend it on other purchases.
2. Set a Household Budget
Track your spending for a month or two, keeping all of your receipts without making too many changes to your normal habits. Once you have enough information, go through your spending to see where you can cut back and save money instead. Decide how much you can afford to save every month, and automatically transfer that amount into your savings.
3. Check Your Interest Rates
Go through all of your bills and check the interest rates. Since any money you spend on interest is essentially wasted, ask your creditors for lower rates, or transfer balances to a new account if it will save you money. Auto loans tend to be more difficult to reduce, but you might want to consider refinancing if you can get a lower rate, dedicating the savings toward your home purchase.
To learn more about how you can save enough money to buy a home, contact Lawrence Realty Inc. They have been one of Red Wing, MN’s most trusted real estate agencies since 1948, helping buyers find properties they’ll love to call home. With their detailed knowledge of the area and decades of experience, you can rely on this team to guide you through the complexities of purchasing a house. Visit their website to start browsing homes for sale, and follow their Facebook for more real estate tips. To speak with an agent, call their office at (651) 388-4745.