Saving Money for a Downpayment

Posted by Steph Kaye on Sunday, April 27th, 2014 at 6:11pm.

Doable, But With Sacrifices

In today's market, you usually need up to 10% of a home's purchase price for a down payment. Which means a $250,000 home could require $25,000 down plus closing costs. If you saved $1,040 a month for the next 24 months, you would hit that goal. Easier said than done... that may seem impossible—but it's not. You will however have to make some short term sacrifices now to save for a down payment on a house.

Give up that extra bedroom for the short term. If you rent in a premium location, think about moving to a less expensive area. It may take you a little longer to commute, but remember it won't be for long. If you can reduce the amount you are paying in rent by $500, and you will be halfway to your monthly goal. Part-Time Job

Become a bartender at a popular bar, or become a yoga instructor at your gym (maybe you can get the gym membership for free). Offer babysitting or pet-sitting services to friends and neighbors. Look through thrift stores and yard sales for great finds, and then sell the items on eBay. 

Cut Expenses

If you don't have a budget, better late than never.  Read through each line item and ask yourself, “What can I do to reduce this amount of money?”

  • Insurance.  Make sure to ask your insurance agent for a quote with several different deductibles. Raising your deductible on your car insurance can lower your premiums.
  • Cable and Internet. Look through your cable bill for charges you can eliminate. Most people don't need 148 channels. Internet connection is free at the local library or coffee shop.
  • Cell Phone. Unlimited texting is a luxury, not a need. Think about the end goal.
  • Dining Out. Cook dinner at home and prepare enough for tomorrow's lunch. Make your morning coffee at home and try not to eat out as much.
  • Gym Membership. Take up a sport that is free.  Such as running, racquetball, tennis and swimming.

Agree on a Plan

Once you determine which sacrifices you will make, make that everyone affected buys in on the plan. Revisit the plan each month to insure you are on track. This is the time to reassure each other you are in it for the long haul. Before you know it, you'll be discussing paint colors for the living room. 

If you are in the market for a new house and would like information on homes for sale, or are first time home buyer not working with a Realtor and would like to schedule a consultation with a qualified Oakland County and Macomb County Realtor, please complete the Lang Premier Properties contact form to have a real estate agent contact you. 

Lang Premier Properties are Birmingham Realtors specializing in Oakland County Real Estate. Stephanie is an agent with Max Broock in Birmingham, Michigan. See what past clients have to say about Stephanie Lang.  Lang Premier Properties looks out for your best interests when you purchase a new custom luxury home. We always recommend working with an experienced luxury real estate agent when buying a new luxury estate.

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