{"id":5525,"date":"2019-10-14T16:36:01","date_gmt":"2019-10-14T20:36:01","guid":{"rendered":"https:\/\/www.juddbuilders.com\/juddbuildersblog\/?p=5525"},"modified":"2019-12-04T16:39:07","modified_gmt":"2019-12-04T21:39:07","slug":"how-to-save-for-a-down-payment","status":"publish","type":"post","link":"https:\/\/www.juddbuilders.com\/juddbuildersblog\/2019\/10\/14\/how-to-save-for-a-down-payment\/","title":{"rendered":"How to Save for a Down Payment"},"content":{"rendered":"

When it comes to saving up to put a down payment on a new home a bit of planning and preparation is invoved. Judd Builders offers beautiful Pennsylvania communities<\/a> with brand new construction homes for sale. Our spacious interiors and spectacular designs range in prices, but can still be in reach. Check out our list of tips to help you plan for making a down payment on a new house and contact our team<\/a> for additional insight to help you get started today!<\/p>\n

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    \"SeriousFigure out how much you\u2019ll need to save<\/strong><\/h4>\n<\/li>\n<\/ol>\n

    Plan to sit down with a mortgage lender who will let you know how much of a mortgage you can qualify for. Generally speaking,\u00a0your housing expense should not exceed 28 percent of your stable monthly income. To arrive at the amount that you can afford to pay for a house, you\u2019ll have to add the down payment on top of that.\u00a0In today\u2019s tight lending market, you should generally expect to make a 20 percent down payment on a house. No, that\u2019s not a requirement\u2013it\u2019s just the minimum down payment to get the best-priced deals. You can certainly put down less, but you will likely be paying a higher rate and, if you have any kind of credit issues, you may not be able to get a mortgage at all.<\/p>\n

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      Determine your timeframe<\/strong>.<\/h4>\n<\/li>\n<\/ol>\n

      If you plan on purchasing a home in five years, figure out how much you need to save per year to have enough for the down payment. \u00a0Naturally, the shorter your timeframe is, the higher your annual savings goal will be.<\/p>\n

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        Find the best way to save for your down payment<\/strong><\/h4>\n<\/li>\n<\/ol>\n

        As a rule, since the money that you are saving for the down payment on a house has a definite purpose, and needs to be reached\u00a0within a specific timeframe, you should not save money in risk-type investment vehicles. Instead, you should save your money in super-safe vehicles like a savings account or a certificate of deposit. Sure, you may be able to earn more money by investing your down payment account in higher risk vehicles, but there is also the very real risk that you will lose money in the process. Remember, if you\u2019re saving for a house, the worst-case scenario would not be\u00a0missing out on returns, it would be\u00a0losing some of the money you needed to buy your home.<\/p>\n

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          Make room in your budget<\/strong><\/h4>\n<\/li>\n<\/ol>\n

          Since we\u2019re talking about saving thousands of dollars per year,\u00a0you have to clear some room in your budget to make sure that your savings goal is doable. That means you may have to earn\u00a0additional income, cut back on expenses, or both. But,\u00a0making room in your budget can help you save the kind of money you\u2019ll need for your down payment, and\u00a0it will also prepare you for managing the type of tighter budget that homeownership requires.<\/p>\n

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            Set up an automated savings plan<\/strong><\/h4>\n<\/li>\n<\/ol>\n

            Unless you\u2019re a saver by nature, and most of us aren\u2019t really,\u00a0you\u2019ll need to automate the savings process. That will mean some sort of payroll savings plan. Just like your 401(k) plan, you should allocate a certain percentage or dollar amount of your regular pay to go directly into a savings account or money market account dedicated to accumulating the funds for your down payment. Not only does this make the process automatic, but it also makes it invisible. Money moves from your paycheck to your dedicated savings account without you even seeing it happen.\u00a0That will remove both the temptation and ability to spend the money on other purposes.<\/p>\n

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              Bank those windfalls<\/strong><\/h4>\n<\/li>\n<\/ol>\n

              You can make the process of saving money for a down payment on a house easier\u2014or even shorten the process\u2014by banking periodic\u00a0windfalls.\u00a0These can include income-tax refunds, gifts received, bonuses or large commission checks, or even the sale of personal assets. By depositing these funds into your down payment savings account, you fast-forward the process of saving money to buy your future home. Regularly depositing a few thousand dollars per year in windfalls can chop a couple of years off of your savings timeframe.<\/p>\n

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                Build flexibility into your savings plan<\/strong><\/h4>\n<\/li>\n<\/ol>\n

                Whatever the size of your down payment, it is important to build flexibility into your savings plan. While you\u2019re saving up money, there\u2019ll be other demands on your finances. These can include major car repairs, replacement of a car, uncovered medical expenses, or even the temporary loss of a job. None of these will magically stop just because you have a goal of saving money for a down payment on a house. You\u2019ll have to be ready when they happen. Make sure that you have an\u00a0emergency fund\u2014before you even start saving for your down payment\u2014and keep it well-stocked. And if you have predictable expenses, such as replacing your car, you\u2019ll need to simultaneously prepare for that\u00a0expense as well.<\/p>\n

                Looking for a fantastic community to move to? Check out\u00a0Judd Builders<\/a>! We have\u00a0multiple planned communities<\/a>\u00a0for you to choose from. Want to live in the heart of Packer Park in South Philly? Check out\u00a0Siena Place<\/a>! Looking for a luxury clubhouse community? Check out\u00a0The Reserve at Creekside<\/a>! Or if you have any questions, feel free to\u00a0contact us<\/a>! We\u2019d love to hear from you and answer any questions you have!<\/p>\n