Best Tips for Saving to Buy a House

 
You are here: Home » MoneyTalk » Advanced Topics » Best Tips for Saving to Buy a House

Buying a house is always an exciting step in life, but also a daunting one. If you’ve never gone about putting money towards a permanent home, it can be a scary prospect. Where do you start? What are the best strategies? How do you deal with problems along the way? All these questions and more we’ll tackle together as we explore some tips for saving to buy a house.

A Strong Savings Foundation

When prepping to save for a house, one of the first steps should be finding out about how much you can afford to save monthly. Balancing your savings against your monthly income can be hard to wrap your mind around, for sure, but thankfully, there’s help for that. Most experts generally recommend that your target savings should only be about 25-30% of your total monthly earnings. If, for example, you earn $7,000 monthly, that’d translate to a range of $1750 to $2100 saved per month.

This amount gives you an idea of what you can afford with your month-to-month mortgage payment if you keep up your savings regularly. Remember though, there’s also the down payment to think about. Generally, the best deals on mortgages come with down payments of 20% and up, so if that’s something you can afford, it’s usually the best range to aim for.

Make a Financial Schedule

With a general range for your capabilities established, next up is figuring out a financial schedule for buying a house. Depending on when you’re planning on purchasing the house, you’ll need to adjust that savings schedule accordingly. The shorter the timeframe, the higher the rate.

If you’re going for a longer-term schedule, it’s best to stock away the funds in a safe place, like a savings account. We’d advise against putting it into something less stable, like the stock market, unless you’re supremely confident in your stock’s stability, lest it all disappear due to a bad day at Wall Street.

Tips for Learning to Function on a Stringent Budget

With all this saving you’ll be doing, you’ll also be prepping to subsist on a smaller budget than you may be used to. When owning a house, you’ll not only have to worry about mortgage, but all sorts of utilities like electrical, water, cable, and more. Being sparing with your spending during the saving period helps prepare you for the responsibilities of being a homeowner.

When saving up, try to cut back on excessive spending and luxuries, like fine dining, unnecessary driving/gas spending, and expensive shopping trips. Keeping a tighter watch on these kinds of activities might not seem like much at first, but will add up over time and save you quite the pretty penny. You’ll have put money towards your eventual home and will have practice for a more frugal lifestyle. Way to go!

Extra Ways to Save

Even with all the info above, sometimes it’s hard to stick to a set plan for savings. Calculating a cut of your checks every month? That’s bound to get annoying after a while. Thankfully, there exists a solution to that problem. Enter automatic savings plans. These handy dandy plans automatically set aside some of your funds every deposit at a rate you decide, so you won’t have to do that pesky math every month.

Trusted lender of over 250,000 customers2

Trusted by over 250,000 customers since 2002, we know how to do business the right way. Our US based customer service team is there for you seven days a week.

LoanMart © 2018 All Rights Reserved. Version: 4.0
Go To topGet it on Google Play

DISCLOSURES

LoanMart may act as the broker for the loan and may not be the direct lender. Loan proceeds are intended primarily for personal, family and household purposes. LoanMart does not offer or service student loans. California loans are made or arranged pursuant to a California Financing Law License. See State Disclosures for additional disclosures.

1Credit approval is subject to LoanMart’s credit criteria standards. Actual loan amount, term, and Annual Percentage Rate of the loan that a consumer qualifies for may vary by applicant. Minimum loan amounts vary by state. Consumers need to demonstrate ability to repay the loan.

2Based on consumers who received a loan from February 2002 to October 2018.

3Application processes could take five (5) minutes to complete. Upon completion, a conditional approval may be given pending review of documentation. Funding time is based on the time from final approval following receipt and review of all required documents and signing, prior to 5PM PST on a business day.

4To exercise the right to rescind, the consumer(s) must notify LoanMart in writing by midnight on the sixth calendar day from obtaining the loan. Within one business day from notice of rescission, the consumer(s) must return any monies received and fees paid on behalf of the consumer(s) by certified funds.

5LoanMart recommends and encourages customers to pay early and often and more in order to avoid additional finance charges.

If you are using a screen reader and are having problems using this website, please call 1-855-422-7412 for assistance.

LoanMart is a responsible lender and takes its legal responsibilities seriously. Questions? Customersupport@800loanmart.com or call 855-399-2261.