How First Time Home Buyers Can Save for a Down Payment
Every first-time buyer has to wrestle with the downpayment, but there is some flexibility depending on the terms of your loan. If you choose FHA, for example, you can easily get into a loan with as little as 3% down on the value of the property. However, you trade that flexibility for mortgage insurance that protects your lender against the liability of your defaulting. If you don’t want to put yourself into this situation, or you just want a lower down payment and better loan rates, you should save for your down payment. Here are some tricks to help you do that more effectively. Interest Banking Interest checking and savings accounts offer a great value to those who want to ramp up their finances for a home, but you have to act sooner rather than later. If you change bank accounts, it might cause some issues with your lender when the time comes. Try to time it 6-12 months before you buy, which also gives you plenty of time to reap the benefits of higher interest rates for savings accounts. Side Work There are several freelance opportunities available online for graphic designers, writers, tutors and all manner of other profession. Try to monetize a skillset you already possess. Even if you add only $100 to your income every month, the extra money puts you closer to where you need to be. Ask Family Parents and family members are allowed to gift up to $13,000 annually without paying taxes on that money. Any assistance they can give would help get you closer to your goal. Bio: Kuba Jewgieniew is the CEO of Realty ONE Group, a brokerage committed to offering its agents the tools and support they need to close deals.