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Tips for Saving for your First Home

The iServe Blog

Dreaming of owning a home? It may seem impossible to save for a down payment considering the average Millenial’s salary! But home ownership is more accessible than you may think. Depending on the loan product you choose, the amount you’ll need to save will vary; our innovative online mortgage tools can help you figure out how much you’ll need.

Saving money for a down payment allows you to secure the mortgage loan you need to get the home you’ve been dreaming of. Here are our tips for young or first time homebuyers:

Determine How Much You Need

You need a target! Contact iServe or use an online mortgage calculator to determine how much to save. Our innovative online tools can help you calculate how much you can afford to spend, and the mortgage product you are interested will play a role as well. For a conforming mortgage, you might want to save up to 20 percent of the purchase price, (that could be a lot of dough); choose an FHA, and you might pay as little as 3.5 percent. If you are a U.S. Armed Forces member or veteran, a VA loan offers the opportunity for a minimal down payment amount. Once you have the numbers, you can start saving up.

Make a Budget

Once you have the target figure in mind, examine your current finances to figure out where you can trim a bit. It might be time to cut down on in-app purchases, or maybe you should downgrade to only one music streaming service. If you are you paying for services or subscriptions, but not using them, you probably won’t miss them! Finding room in your budget for savings allows you to add to your down payment fund each month and gets you closer to being a homeowner.

Credit Matters

This is also an ideal time to check your credit. Depending on the loan you are interested in, you’ll need to have a score of at least 580 (for most products). The higher your credit score, the better, though. Taking the time to review your credit and taking steps to correct errors now allow you to have more options later. Incorporate credit repair into your plan now, and you’ll be able to access better rates later. Simply knowing your score and monitoring it regularly can help you avoid surprises later and ensure you don’t hit a roadblock when you apply for your loan or mortgage online.

Bank Bonuses and Extras

Any extra income you get, from overtime to bonuses, gifts and even a refund, can be applied directly to your down payment fund and help you get a mortgage. That birthday check from Grandma? Save it! These gifts and windfalls are not part of your normal budget, and you won’t have to give up anything to apply them directly to your home savings account.

Automate Savings

As a Millennial, you know technology, and you know you can automate savings. Do it! It is tough to remember to set aside money each month. When you automate the process, your bank withdraws money from your account into savings on your behalf. Automated savings, even in small amounts, is effortless and allows you to steadily build your down payment account.

When you’ve gotten almost to your goal, you can begin the home shopping and mortgage loan process. When you’re ready, one of our loan officers can help walk you through the process and ensure that you can make the most of the money you’ve worked so hard to save. We specialize in working with first-time homebuyers.