Tips for Saving for Your Down Payment on Your New Home in Riverside, CA
You want to buy a new home, but think it’s out of your reach? It doesn’t have to be. With a little planning, smart decisions, and discipline, it can be done. Don’t worry, it’s easier than you think. The minimum amount you’ll need to save for a down payment for your new home in Riverside, CA depends on your financing. Traditionally, a down payment is 10-20% of the cost of a home. This amount can vary, so talk to a loan officer to determine exactly how much you’ll need to save. Whatever that amount is, you can do it. It’s all a matter of finding ways to save and rethinking your budget.
How will you do this? The best way to achieve any goal is to have a solid plan. Here we’ve developed a step-by-step plan that can work for anyone. Clean up your credit. Know how much you need to save and set a time goal. Create a separate savings account just for your down payment. Lower as many monthly expenses as possible to free up money for saving. Save windfalls.
Clean up Your Credit
There are three simple steps to cleaning up your credit. First, get copies of your credit report from the three major credit reporting agencies; you are entitled to a free copy every 12 months. Next, review your reports, looking for anything that is inaccurate or incomplete. The third step is a little more involved, but very important. Send a dispute letter to the Credit Reporting Agency detailing all inaccurate or incomplete information on your credit report. Need to just build your credit? The quickest way to do this is to pay off the full balance on all your credit cards every month.
Know the Amount of Money you Need to Save and Set a Time Goal
Budgeting is all about being informed and open-minded. Once you’ve spoken to a loan officer and know how much you need to save, set a reasonable goal for how much time it will take you to save this amount of money. Give yourself as much time as you think you’ll need, but don’t set your goal too far into the future, as you might get discouraged with the amount of time you think it will take. The key is to set reasonable expectations for yourself; you’re much more likely to achieve your goals if you don’t set your expectations out of reach of what you can realistically do.
Create a Separate Savings Account
Set up an account that is dedicated to helping you save for your down payment. Sit down with a calculator and determine what percentage of your monthly income you can realistically set aside, then place that money in your dedicated savings account every time you get a paycheck. If you set up your savings account in the same bank as your checking account, you can simply transfer the money between accounts.
Lower as Many Monthly Expenses as Possible
Do you get to the end of the month and wonder where all your money went? Take a close look at your bank statement. You’ll discover that a lot of your money went to lots of small purchases. It’s not the big ones (rent, car payment) that break the bank, and besides, these are unavoidable. Many expenses are avoidable, though. So cook instead of ordering take out. Make a few large shopping trips instead of many small ones. You’ll have less opportunity to pick up items you don’t need. Instead of going out, stay in with a good movie and a few friends. You’ll have just as much fun.
Windfalls can come in many forms. A large tax rebate, an unexpected inheritance. Although it may be tempting to splurge with this money, placing it in your dedicated savings account can go a long way toward helping you save the money you need for a down payment.
It Will Be Worth it
Saving money for a down payment on your new home in Riverside, CA may seem overwhelming, but if you follow the action plan we have outlined here, it will be easier, and will happen more quickly, than you thought possible. So go ahead and take the plunge; just make sure it’s a well thought out plunge. Buying a new house means building equity, and more importantly, it means building a home. Isn’t that something we all want?