A 20% down payment is a significant chunk of change. But with enough time to prepare and a little bit of creative budgeting, you’ll be able to save up for your new home sooner than you think. Follow these helpful budgeting tips to get started!
Break Down Your Budget
While it’s never a bad idea to start saving for a down payment, it’s an even better idea to analyze your budget before you consider a home purchase. This will help you set realistic expectations and concrete goals.
First, make a list of all of your necessary monthly expenditures — rent, power, water, phone service, student loans, etc. Add these expenditures up and subtract them from your monthly take-home pay. Then, look at everything that is left over and consider what to cut back.
After you’ve taken a look at your spending, determine what home price range (and, consequently, a 20% down payment) you could comfortably afford based on your current monthly budget. Our handy mortgage payment calculator might help! Continue reading