Saving for a down payment can be one of the biggest barriers to home ownership, and with lenders tightening credit over the past few years, a substantial down payment is even more crucial to securing a home loan.
However, that’s not to say you cannot secure financing without a large upfront investment. Many mortgage lenders offer products with low down payment options (zero to five percent down). Still, it is good, general advice that you should put down at least five percent when making a home purchase.
So how can you accumulate the thousands of dollars needed to make an investment in a home? Outside of straight, grind-it-out saving, there are several steps you can take to supplement your income, such as:
- Save your tax refund
- Savings Bonds / Investments
- Checking / Savings Account / RRSP’s – put the same amount away every pay check and watch it grow
- Gifts received
- Gifted funds from immediate family
- Borrow against equity in a second home if available (refinance existing property)
- Hold a garage sale or sell big-ticket items of value that you can part with
- Take a second job (casual or part time) to save additional funds
If you’d like more advice on ways to make sure you have enough down payment for the home you want to buy, or any other mortgage or refinancing questions, give us a call at (865) 909-0211.
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