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For many people ready to make the switch from renter to owner, coming up with the necessary down payment can be a challenge. The good news is that with some preparation and organization, it doesn’t have to feel like such a huge undertaking. Here are some ways to get financially prepared to purchase your Chicago dream home:
Identify Your Goals
The first step to a solid down-payment savings plan is to get clear on your goals. How much will you need to save? What is your timeframe? Connect with a loan officer if you need assistance understanding your down-payment options. Consider what makes sense with your financial situation, what you need in a home, and how long you’re willing to save for. When you get clear on these things, it’s much easier to work efficiently towards your goals.
Sometimes, taking a bit of the responsibility off yourself can be a smart strategy. Instead of asking yourself to remember to regularly contribute to a down-payment savings account, set up a regular automatic deposit. That way your savings will grow, whether you’re thinking about it or not.
Refine Your Budget
This can be a powerful step for many savers. If you don’t have a clear budget, now is the time to make one. If you already have one, it’s time to review it. Look at all of your current expenses, and ask where you can make some cuts. Chances are that the way you’ve been spending has reflected your finances as a renter. Now that you’re prepared to save up to become a homeowner, those finances may need some adjustments. With the exciting goal of homeownership in mind, it’s often easier to make some of those sacrifices in your budget that will help you get there.
Create an Additional Income Stream
Often called a side hustle, a small project or business you create in addition to your day job can be a great tool for accelerating your savings process. This doesn’t need to be a massive endeavor. If there’s a skill you have, service you offer, or product you create, there’s likely a way to monetize that. Direct all the profits from your side hustle into your down-payment savings. This is extra money that you weren’t relying on in the past, so you know you don’t need it to keep your budget working.
Don’t Neglect Your Emergency Fund
Though saving for a down payment can feel like a top priority for future homeowners, it shouldn’t come at the expense of other important preparations as well. In addition to a down payment, homeowners should also have an emergency fund for their transition to homeownership. With no landlord, repairs and maintenance can quickly add up and catch some new owners by surprise. Having an additional buffer to keep these things from derailing your budget is important.
For those ready to become Chicago homeowners, saving for a down payment is often the first step. With the right strategies in place, you can accelerate your savings to help you reach that goal of homeownership faster. Do you have any other tips for saving for a down payment? Share them with us.