Saving money for a down payment on a home in Southern California can seem a bit overwhelming. However, with so many incredible loan products available to first time buyers, and experienced buyers, there is no reason to assume that saving enough money for a down payment is impossible. In fact, considering that so many incredible options are available from FHA, Fannie Mae, Freddie Mac, and through VA loans, the days of having to come up with a full 20% down payment are over for many buyers. Instead, many products allow for down payments of less than 5%.
It is important to note that having a substantial down payment can allow you to reduce your monthly payments, and may position you for better interest rates, so it is certainly worth the effort to make a savings plan and stick to it.
Here are six tips to follow to successfully save for a down payment to buy a home in SoCal:
Determine How Much You Need
One of the best ways to determine how much you need for a down payment is to speak with a trusted, experienced and top-reviewed mortgage professional. By running the numbers and looking at different options for mortgage loans in Los Angeles, Orange County, and throughout Southern California, you'll know how much you need to save, and can then begin strategizing and implementing a plan to reach that goal.
Set a Deadline
It's helpful to set a goal, or a deadline which corresponds to when you would ultimately like to buy a home. By having a goal in mind, you'll be able to adjust how much you need to save each week, or month to be where you want to be, when you want to be there.
Research Options for Saving
Although it may be tempting to try to earn money through risky short-term investments, it's important to realize that the risk is real. You may lose money in the stock market, for example. As such, during the saving period, it might be in your best interest to save in a bank, or a CD, to ensure the money stays safe. While you may not be generating a great deal of interest on your savings, you're ensuring your money stays safe, so you can purchase your home, in the time frame you've set.
Find Room in Your Budget for Cuts
You may have to sacrifice some luxuries while you're saving for a home, but in the long run, becoming a homeowner, will be worth it. Look for areas in your budget where you can trim spending, and commit to doing it.
Consider Setting up an Automated Savings Plan
The truth is most Southern Californians struggle to save. Automated savings plans, which take money either from your paycheck, and put into a savings account, or those which withdraw from your checking account and go into savings can be very helpful as you save for a down payment.
Save bonuses, tax returns, or big commissions
If you receive any financial windfalls throughout the year, put them into your savings, rather than splurging. This helps speed up your savings, and helps to ensure that you'll be ready with your down payment when you find the home you love.
If you're preparing to buy your first home in Los Angeles County, Orange County, Riverside County, San Bernardino County, Ventura County, or San Diego County, we invite you to call us to discuss your real estate goals. At local, SoCal based Summit Lending, we offer numerous loan options some of which require low down payments.
Our goal when working with homebuyers in Southern California is to secure the best loan, at the lowest interest rate available. Our team of top-rated and top-reviewed SoCal mortgage professionals have years of experience in working with first time and experienced buyers and we're here to help you when you're ready.
Summit Lending is a top Yelp! reviewed mortgage broker and lender, providing Californians with great financing, low rates, quick approvals, and a suite of loan products from FHA to VA to Fannie Mae, Freddie Mac, and more.
Based in Huntington Beach, CA, with offices throughout Los Angeles, Orange and Riverside Counties, the top rated mortgage consultants at Summit Lending can be reached online, on Facebook, or via phone at 888-451-9006.