What? Save for a down payment in one year? Am I nuts? Well, maybe a little, but not because of this!
How to make it possible to save for a down payment
You don’t need to give up everything to save for a down payment. Simply cut back just a bit.
Morning Coffee
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| Starbucks $4.50 x 5 x 52 weeks |
= | $1,170 | Have Coffee at home and treat yourself to Starbucks once a week | = | $419 |
Work Week Lunches
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| $12 x 5 x 52 weeks | = | $3,120 | Brown bag it 4 days and treat yourself to lunch out once a week | = | $1,404 |
Weekday Happy Hour
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| $35 x 2 x 52 weeks | = | $3,640 | Cut back to happy hour once a week | = | $1,820 |
Night Out with Friends
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| $150 x 52 weeks | = | $7800 | Cut back to every other weekend | = | $3750 |
| Yearly total $15,730 | Yearly total $7,393 | ||||
Potential Annual Savings $8,337 |
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Is that enough for a down payment?
It could be depending on the loan program that you are applying for.
VA and USDA loan don’t require any down payment so you could use your savings to pay for closing costs.
FHA loans require 3.5% down payment. That potential down payment is enough for a sales price of $238,200.
If you want to maximize your price point, combining your funds with a down payment and closing cost assistance package could be the right solution.
Program Package Example
| Sales Price | $415,000 |
| First Mortgage Conventional Fixed Rate |
$394,250 |
| Down Payment Assistance | $414,525 |
| Closing Cost Assistance | $411,900 |
| Your Contribution | $6,968 |
As you can see, it is possible to save for a down payment to purchase a home is possible with the right game plan.
Are you in California, contact me for a free consultation. Outside of California? Contact your local lender to discuss your options.
If you have any questions on this topic or any other mortgage-related topic, by all means reach out to me.
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