It is expensive to purchase a home. Saving money can take many years. According to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau (HUD), the average sale price of a home in January 2021 was $346,000. You want to know Guide to Save Money For House In 6 Months
The average sales price for a house was also $408,800. It can be difficult for first-time homebuyers to commit to a price range within this range. However, mortgage rates are very low so you can buy real estate with monthly payments that are comparable or lower than rent.
If you’ve set a savings goal–including for a down payment and closing costs – and you’re getting ready to buy, use an online mortgage calculator to help figure out your monthly payments and understand how much more you’ll need to save before making a move.
Table of Contents
Follow this guide to discover the seven ways to save money for a house:
- You can save extra money, such as from tax return, stimulus checks, or year-end bonuses.
- Get low-to-zero down mortgages
- You might consider a balance transfer credit card
- Use your retirement plan
- Automate your high yield savings account
- Find a roommate
- Reduce your non-essentials
Ways To Save Money For A House
1. You can save extra money, such as from tax return, stimulus checks, or year-end bonuses.
The third round of stimulus checks totaling up to $1,400 for individuals was distributed to millions of Americans as part of President Biden’s $1.9 trillion coronavirus relief plan.
You have many options for starting to save money for your down payment.
2. Get low-to-zero down mortgages
Saving money for the standard 20% down payment might be an uphill battle. Many first-time home buyers go with an FHA loan because they require only a small down payment and have less stringent credit requirements.
Jason Gelios, a realtor at Community Choice Realty and creator of The AskJasonGelios Real Estate Show, says, “Even with limited savings, first time home buyers can also take advantage of low to zero down mortgages, and use cash to cover upfront costs such as the home appraisal and inspection.”
It is generally true that the best mortgage terms and rates are reserved for applicants with a strong credit history and good credit scores. However, you can still take advantage of low- or zero-down mortgages to help you purchase a home without spending a lot of money upfront.
3. You might consider a balance transfer credit card
If you’re carrying large balances on high-interest credit cards, you might want to consider transferring them to a balance transfer credit card. These cards often offer lower interest rates during promotional periods.
These cards may offer better terms than your existing credit cards. You can also consolidate your credit card debt to reduce your monthly payments. For more information visit there fb page.
You might be required to pay a balance transfer fee at the beginning. After the promotional period, you may see a higher interest rate. Your credit score might be impacted due to the credit card approval process.
4. Use your retirement plan
Orlando Miner, CCIM and CEO of Miner Capital Funding, recommends using your retirement 401(k) as part of your overall plan. Retirement plans can be a great way of grabbing money for your mortgage. Many plans offer a penalty-free option for mortgages.
Keep in mind that you can only borrow $50,000 or half of the vested balance in your 401 (k) account. The loan will have to be repaid with interest and some 410(k),s will require repayment within five year.
5. Automate high-yield savings accounts
A high-yield savings account typically pays higher interest than a traditional savings account. A high-yield savings account can help you reach your savings goals.
You should make sure that part of your paycheck goes automatically into this account so it doesn’t get spent elsewhere. It might be worth opening and automating a separate savings account for the sole purpose of saving money on your new home.
6. Find a roommate
You might think about getting a roommate if you are unable to pay rent on your own. You can split your monthly rent payment, utilities and other recurring costs in half and save the money in an interest-bearing bank account. You’ll save $1,000 each month and have $12,000 at the end of a year. Plus, interest earned.
7. Reduce your non-essentials
Consider cutting down on your daily expenses such as gym memberships and subscriptions to magazines, streaming services, and dining out. This is one of the best ways you can save money for a mortgage.
Cambio’s co-founder Justin Dwyer says that if you go to a drive-thru restaurant every day, you should take a different route so you don’t see the storefront. If you don’t see what you are craving most, you’re less likely not to feel a craving.
It is costly to buy a home. By determining where you want to live and the type of home you are looking for, you will be able to determine how much down payment you can afford as well as your future mortgage payments.