How Can I Save for a Down Payment on a Home in Rocky Mount, NC?
Where do I start on saving for a down payment on a home?
First, determine how much home you can afford, your total down payment, bank expenses in conjunction with the loan, closing costs, inspections, insurance, etc.
Second, determine how soon you want to buy your home. Keep in mind that interest rates are always going to be one of the main variables as well as the type of loan you use.
So how do I come up with this information? Your local mortgage lender. This is the best place to start, as they can give you an accounting of the costs associated with the home purchase, but they also have access to your credit score which is a vital piece of information in the process.
Here is an example:
For this example, we are using a purchase cost of $100,000 with an FHA loan requiring 3.5% down, plus roughly 3% more to cover the additional purchasing costs. By no means are we representing this as actual numbers needed. In this example only, your total cost would be $6925.
If you are looking at purchasing in 5 years, the numbers break down as $1385 needed per year or $3.79 per day. How does the $1385 per year stack up in your life? Is that money back in a tax refund, year end bonus or is it $53.27 out of your pay check every two weeks going automatically into a savings account? What about at $3.79 per day? Does that equate to a couple less lunches out per week or how about that latte from your favorite coffee shop?
Now let's look at 3 years purchasing time. The numbers are $2308.33 per year or $6.33 per day. Again, look at your goals for saving those funds. If you are looking at the pay check savings, you are now putting aside $88.78 every two weeks. Does that $6.33 a day become one less dinner out?
Remember to start with a trusted Mortgage Officer to help you define the type of loan and the purchasing costs associated with the home you can qualify to purchase. Then by knowing your numbers and setting a time line, you are in control of saving for that new home.
What do you do differently to save daily, weekly, monthly or annually?