Hello, everyone! Since I’ve been working with several first-time home buyers over the past few months, I thought it would be good to provide some steps and strategy for generating your necessary downpayment funds:
1.) Lay it all out on the table – find out where you currently stand with regard to credit record, monthly income and bills. Taking an honest look at your current overall financial picture is POWERFUL!
2.) Set a deadline – the “D” word – it can be a GREAT motivator! How quickly do you want to have the funds together and begin shopping in earnest?
3.) Create a separate downpayment bank account or “piggy bank” to segregate the funds.
4.) Take a look at your bills, especially credit cards (interest payments delay your progress and really impact your debt-to-income ratios). Make a list of your creditors, how much you owe, interest rate, and monthly payments. Use a debt snowball plan to eradicate them one by one.
5.) Automate your savings – once you determine the amount per pay period (or per month) that you’d like to save for your downpayment, have it automatically deposited in savings BEFORE you have the opportunity to spend it on another latte, pair of shoes, iTunes downloads, etc. 😉
6.) Create a graphic representation or reminder of your goal – put it on the bathroom mirror or your fridge. Update it weekly showing the incremental steps that you’re making toward the goal and deadline (it’s VERY motivating to see your progress in black and white)!
I realize that saving in advance for something you really want can seem un-American, but it’s the way to go if you want to build wealth. 😉 Saving for a home, although challenging, is so very rewarding, too. Know that I am on your side and here to help when you have questions. By the way, when the time is right I’d be happy to connect you with a trusted, down-to-earth mortgage loan professional. I have a list of pros who provide EXCELLENT service to my clients every day…
Set a goal and make it happen!