3 Tips To Save For Your Downpayment | Blogging

Clean up your credit

You need your credit score as healthy as possible before you apply for a mortgage loan. According to Experian, the average credit score in Massachusetts is 710. A score of 660 should be high enough to qualify you for a good loan with a low-interest rate. But it always depends on your lender so make sure you do your research there too.

The best way to a good credit score is by paying off your debt as much as you can and as consistently as you can. Make sure you clear up any disputes on your credit report – this will boost your score.

Automate your savings

Saving money can be hard. If you’re having trouble with it, you’re not alone. According to The Atlantic, one of the biggest reasons that nearly half of all Americans have little or no emergency savings is because they have taken on too much mortgage debt.

So making sure you have a monetary cushion before you take on a mortgage commitment is key. Automating your savings can make that easier. Just set up a regular transfer from your checking account to a separate savings account aka the dream house fund. If you have direct deposit (or even if you don’t), set up the transfer to occur when your paycheck comes in That way you make sure you’re not draining your checking when it’s low and incurring overdraft fees. By automating the process you save yourself headspace and eliminate the temptation to spend.

Trim the fat

Get rid of any bills you don’t really need. Cable TV? Switch to Amazon Prime or Netflix. Renting a two-bedroom apartment for just yourself? Maybe you could manage with less space aka lower rent. The more thrifty you can get with it, the faster that down payment fund will accumulate.

Pro tip: If you can save just 20% of the your target price, you may even qualify for a lower interest rate.

As we all know saving money can be hard, especially over a long period of time. But when you’re sitting on your very own porch with a glass of wine and the freedom to paint any wall you want, it will be worth it.

 

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