The gold ole’ days of buying a home with little or no down payment are long gone now, thanks in part to the near-collapse of the credit sector and financial system that started in 2007. Due to the fallout from the sub-prime mortgage mess and subsequent losses that resulted from foreclosures and short sales, lenders are more particular than ever about whom they will lend money to for a home loan. By the way, to get a look at all available Remax Condo Listings in Winnipeg, go here.
Today's Lending Environment
In particular, first time buyers may find that obtaining a home loan is decidedly more difficult today than it was just a couple years ago. Aside from the obvious qualification of possessing an excellent credit score, lenders are now looking for large down payments from first time buyers.
Considering that today's lenders expect a 20% down payment, first time buyers must save tens of thousands of dollars, thereby making the process of becoming a first time home owner all that more difficult.
If the thought of saving tens of thousands of dollars for a down payment is simply too daunting, you may be over-thinking it. Instead of looking at the big picture of having to save a large sum of money, think smaller. Think in terms of saving on a weekly, even daily, basis, and soon that large number won’t seem so large anymore.
4 Smart Down Payment Saving Tips
Here are our essential tips for saving for your first home:
· Make a budget and stick to it. You won’t know how much money you can afford to save each month if you don’t know how much you need for bills each month. Once you have made a budget, commit to saving a certain amount of money (think 10 percent). Don’t be overambitious, though, as this simply wouldn’t be realistic. Instead, consider realistic living expenses each month and save the rest.
· Set up automatic debit from your paycheck or bank account each month so you never miss the money. The best way for first time buyers to get started saving for a down payment is to simply have the money deducted from your bank account or paycheck each month. Chances are you won’t even miss the money each month.
· Keep your house savings account separate from your other accounts. A good rule of thumb for first time buyers when saving for a down payment is to set up a separate bank account (choose a competitive, interest-bearing account) from your regular savings and checking accounts.
· If you don’t think you can afford to save each month, rethink your spending habits and your budget. Simply put, if becoming first time buyers is important enough to you, you will find the money to set aside for a down payment. If necessary, rethink your budget and cut back on spending, as needed. For example, rethink your television cable package (Do you really need premium channels?), your dining choices (Can’t you pack your lunch and save?), and your caffeine fixes (Have you thought about what those fancy coffee drinks are costing you each month?). These little spending changes can add up to a large down payment for a house!
Today's first time home buyers are expected to come to the table with good credit, solid employment, and a strong down payment. Thankfully, with these tips, you can save the money you need for the down payment of the home of your dreams! Check here for a look at the current real estate market update.