Perhaps you are planning to buy a house in the future. But with interest rates still low, now’s the perfect time to start pulling together the funds you’ll need for the down payment. Your ability to come up with at least 20% of your home’s purchase price can help you avoid paying a PMI and get the best mortgage rate.
City Creek Mortgage provides some tips to help you go about it.
Start paying off credit cards
Your credit card debts can stand in your way of saving up a down payment for your dream house. All a credit card balance does is accumulate more interest charges. That means you spend more of your earnings paying off the debt. Focus on clearing the highest interest rate debts before moving to the next ones. That helps you save more for your down payment.
Take advantage of your IRA
The IRS is always ready to help people own a home, especially if it’s their first time. According to tax laws, you can use up to ten grand in IRA money as a down payment on your first home. If you are married, then your spouse can use the same amount as well, making it even easier to raise your down payment.
Look for special programs
Thanks to a myriad of special programs dedicated to helping home buyers, no one needs to struggle to raise a down payment. There are offices that buy mortgages and package them as investments. These organizations can provide great support to aspiring home buyers who are struggling to save enough money for the down payment. Check out relevant state agencies, nonprofit organizations, and community groups as well.
Buying a house is still considerably more affordable than paying rent. If you can find a way to come up with a down payment for the purchase, then the transition from a renter to a homeowner becomes smoother, and you can start saving more for the future.