Claire LeBlanc - REALTY EXECUTIVES



Posted by Claire LeBlanc on 1/30/2019

It can be difficult to find the extra savings to put towards your first home as a renter. With rent and utility prices rising, most peopleís paychecks are leaving them with less and less savings at the end of the month.

Buying your first home, however, can be a great long-term financial decision. It will help you build equity, and, eventually, youíll be able to use that equity toward another home or toward retiring.

In todayís post, weíll talk about some of the ways to save for a down payment while renting an apartment.

How much to save

In order to make the most of your first home purchase, youíll want to save up as much of a down payment as possible. This will help you receive the lowest interest rate and reduce the amount youíll pay toward interest.

If you can manage to save 20% of the loan, youíll also be able to waive private mortgage insurance (PMI), that would otherwise set you back around $100 per month or more.

Smart ways to save while renting

If youíre ready to get serious about saving for your first down payment, letís talk about the best way to approach your savings plan.

Pay off small debts

If youíve had that lingering credit card debt that youíve never quite paid off, now is the time. Take a look at your current debts. Pay off the smaller balances first and focus on debt with the highest interest rate.

This will enable you to start making larger deposits toward your down payment savings sooner and can help you avoid needlessly paying interest on small loans and credit card debt.

Open a dedicated account or CD

The best way to make sure you contribute to your down payment savings plan is to open a savings account or take out a CD (certificate of deposit).

A savings account with a high-interest return is a good option for people who are worried that they may need to access their funds before theyíre ready to buy a home.

If youíre comfortable with not being able to access your funds until a set date, then a CD could help you save more money.

Since CDs are a one-time payment, many people choose to combine both CDs and high-interest savings accounts to achieve their savings goals.

Regardless of which option you choose, be sure to shop around for the highest interest rate. Online banks tend to have higher rates than traditional banks and are also easy to sign up for.

Direct deposit a portion of your pay

Opening a bank account or CD wonít do you any good if you donít commit to contributing to it. If you are paid via direct deposit, visit your HR office and ask them to reassign a portion of your weekly pay to your new account.

By following these tips, youíll be able to better prepare for your down payment. Donít  wait! The sooner you start saving, the sooner youíll be able to purchase your first home.





Posted by Claire LeBlanc on 9/14/2016

Saving money is never an easy task. And saving money for a down payment on a home is especially difficult. Between trying to pay down debt, whether it is student loan or credit card debt, a car loan, insurance, rent, spending money and trying to save for retirement and your emergency fund, how does that leave any money left to save for a down payment? Letís take a look at a few smart ways to save for a down payment. First things first: how much you are able to spend? This will determine how much you need to saveó 20% of the total home cost. Once you have that figured out you can begin to plan what it will take to save that amount. It should be your goal to save 20% or more, although there are ways around that number. Cut expenses: Cutting expenses is one of the ways to start saving more money. First, take a look at the things that you spend money on each month that you donít necessarily need. Do you buy groceries and then go out to eat 3 or 4 times week? Cutting down to only going out once a week will save you some big bucks at the end of the year. Can you cut down on any of your utilities such as cable and Internet? What about your rent? Could you get roommates to alleviate the cost of rent or move to a lower cost apartment? Invest: Investing your money, smartly, is the quickest way to increase your money and build your down payment amount. Investing, in general, will not make you crazy amounts of money really quickly (unless youíre one of the lucky few) but it does add up faster than money sitting in your savings account or under your bed. Consider opening up a CD, an IRA account (there are restrictions), or investing in the stock market. It will take a couple of years for this to really build, but the returns will be worth the wait. Be sure to read up on the best option for you and keep an eye on the market if you are planning on investing in an IRA account or stocks. Automate Savings: If you have the funds but just arenít the best saver then the easiest way to save more money is to automate it, either through your work or bank. Automating your savings will make it seem like that money was never there, therefore making it easier to forget about it and keep it in savings. Youíd be surprised how quickly your money can add up. Additional Income: If you really want to speed up reaching your savings goal then you may want to consider adding another source of income. There are so many ways to earn more money such as selling your crafts online, blogging, a second job, etc. Saving all of the money you earn will expedite your savings. There are also other sources of income such as a bonus, or tax return that are not a part of your regular income. These types of income should also be saved towards your down payment to reach your goal sooner. If purchasing a home is of utmost importance to you, but you are lacking the down payment then it is extremely important to make saving a priority. As detailed above, there are many ways in which you can accelerate the process of earning and saving more money.