5 Tips for Saving for a Property
There is nothing more exciting than saving for a property. It’s a challenging goal and whether you’re buying your first one to live in or you are buying a property to rent out, the process could be a challenge. You get the chance to have a property in your portfolio, and that’s going to serve you well in the future. So, to get you on track, in this contributed post, here are five tips to help you to effectively save for the future.
Get your paperwork in order. When you get ready to buy your own property, it’s critical to get your paperwork in order and that includes ensuring that your property deed paperwork is in place. Many lenders will ask for documentation about your income, assets and debts and having these documents ahead of time will expedite the process of getting finance. You want to be ready to close and that means ensuring that your credit is also in good standing. Talk to a financial advisor for the best advice as they’ll know what to tell you!
Set a budget and a goal. A deposit is a big deal and you can start saving when you have a goal set. You need to know what your down payment goal is so that you can budget it correctly with your income. Typical down payments are around 20% of your home’s purchase price, so calculating what you’ll need is a must. Remember that if you pay under 20%, most of the time, you may need to pay an additional PMI (Private Mortgage Insurance) per month. So, try to have 20% down, if you can. Sometimes, you may qualify for a first time homebuyers’ incentive that doesn’t require a PMI for less than 20% down.
Open a different account. When you’re saving for a deposit, put these funds in a different high yield savings account. You want to keep these savings separate from other goals so that you can see your progress and also not spend it. By keeping the savings isolated, you can track your progress and there are even savings accounts designed for buyers.
Cut out what you don't need. How much money are you spending on unnecessary expenses? It’s time to cut those down. Every penny you have outside the necessities should be added to your savings so that you can lower your expenses. You can shop around for deals on utilities, internet and transport and you can cash all the extra that you save into your property savings account.
Consider building your income. Can you add to what you're doing so far? Adding another income stream or two makes all the difference to your property savings and you can do so many things to build it up. Consider renting out a portion of your home, or your driveway, or even the garage to others to benefit from. This is a great way to ensure that you are adding as much as possible to your savings account.
Home ownership doesn't have to be out of reach. If you know what you’re aiming for, you can hit your goal early and not fall behind any further.
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