{"id":1486,"date":"2016-07-24T01:54:01","date_gmt":"2016-07-24T05:54:01","guid":{"rendered":"http:\/\/falconcresthomes.com\/blog\/?p=1486"},"modified":"2021-07-21T05:11:50","modified_gmt":"2021-07-21T09:11:50","slug":"first-time-home-buyers-5-tips-to-help-you-save-for-a-down-payment","status":"publish","type":"post","link":"http:\/\/falconcresthomes.com\/blog\/first-time-home-buyers-5-tips-to-help-you-save-for-a-down-payment\/","title":{"rendered":"First Time home buyers: 5 tips to help you save for a down payment"},"content":{"rendered":"

Deciding to buy your first home is an exciting and fun time. But saving for your first downpayment, which is a one-time cash payment you provide at the closing and is typically 20 percent of the home\u2019s cost, can be challenging and intimidating. However, with a little financial homework, time, and commitment the process of saving for your down payment will go smoothly. Below are five tips to help first-time home buyers save for a down payment.<\/p>\n

1.Determine What You Can Afford and Plan a Budget for Saving for Your Down Payment<\/i><\/h3>\n

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Before you start looking for your first home, it is important to determine exactly how much you can afford monthly for the mortgage and interest. It is essential to also consider homeowners association (HOA) fees, taxes, insurance, utilities, maintenance, and other bills that come with home ownership. If you are a two paycheck family, it is often recommended you base this on one paycheck. For instance, if you can afford \u00a0$1200 a month in mortgage and interest, then based on a 30-year fixed rate mortgage, with an annual interest rate of 3.85%, your home will be valued at about $255,000. \u00a0Once your determine the value of the home you can purchase, you can calculate the 20 percent down payment. \u00a0The next step is to create a monthly budget, including a designated amount to save towards the down payment. \u00a0Finally decide your needs for a home such as location, size, and features, like transportation and schools. \u00a0And, consider cutting out big expenses such as vacations and a new car, and designate these saving towards the downpayment.<\/p>\n

2.Establish a Separate Savings Account for Your Down Payment <\/i><\/h3>\n

Establish a separate savings account for your down payment. This designated account will reduce the temptation to spend the savings. \u00a0Automatic monthly contributions to the savings account is also highly recommended.<\/p>\n

3.Commit Your Windfalls to Your Down Payment<\/i><\/h3>\n

To speed up your savings towards the down payment, invest your extra income, such as your tax refund, bonuses, gifts, etc., to your down payment. \u00a0This extra cash will significantly increase and quicken your savings towards a down payment.<\/p>\n

4.Reduce Your Monthly Bills by Shopping Around or Downsizing<\/i><\/h3>\n

Reduce your monthly significant expenses by shopping around for better rates for your car insurance, renter\u2019s insurance, health insurance, cable, the Internet and cell phone plan. Also consider a smaller, cheaper apartment or – temporarily – \u00a0move in with a helpful relative. And, see if you can lower your monthly payments on your car and student loans and credit cards, by refinancing. \u00a0Then put the savings towards the down payment.<\/p>\n

5.Investigate Government First – Time Home Buyers Assistant Programs<\/i><\/h3>\n

Because buying your first home is one of the largest investment in one\u2019s life, the Canada\u2019s Economic Action Plan<\/a> created the First-Time Home Buyers\u2019 (FTHB) Tax Credit and expanded the Home Buyers\u2019 Plan (HBP). \u00a0Both of these programs provide first-time home buyers benefits towards their dream of homeownership.<\/p>\n