Buying a house is a major accomplishment for any first-time homeowner but it can also be a major stress on your finances. This is why it is important to be organized with your funds and talk with a mortgage professional to avoid stretching your limits too far.
To start, make sure you have enough money saved up to afford a reasonable contribution to your home’s down payment. Your down payment is a percentage of the home’s purchase price and if you pay less than 20% you will be required to pay for mortgage default insurance. This is an additional fee that is charged by your Milton mortgage brokers, that way they are protected in case you default on your payments. This insurance, however, does not protect the borrower, only the broker.
So, to avoid having to pay for this additional fee, your local Milton mortgage brokers with Loewen Group Mortgages have listed some useful tips for saving for a down payment.
Tip #1: Open A Separate Savings Account
A useful tip to help you stay organized with your finances and help save for a down payment is to open up a separate savings account and do direct deposit. With direct deposit, you can have a set percentage be taken out of your paycheck every pay period and have that amount be automatically deposited into your account. This is a useful, mindless way to save money and help you avoid spending those funds on something else.
Tip #2: Reduce Your Everyday Expenses
Try to cut back on your everyday spending and instead, set aside that money to help pay for your down payment. A useful tip to help reduce your expenses is to try and avoid going out to eat as often. Purchasing groceries and cooking at home can help you save hundreds of dollars every month.
Tip #3: Avoid Extravagant Vacations
For one year, try not to go on an extravagant vacation and instead put that money aside into your savings. Look for inexpensive trips that can be taken instead, such as going camping or taking a road trip, that way you can still enjoy some time away.
For more useful tips on ways to save for a down payment or if you would like to learn about current mortgage rates in Milton, please contact the Loewen Group Mortgages team at 289-270-1586.