Buying a home is an exciting step towards financial independence. You’ll be able to save up some money, build equity and watch your investment grow over time. If you don’t have the cash on hand, it might seem like buying a home is just too difficult or out of reach.
But a down payment can be as small as 1-2% of the purchase price, but you will want to do this sooner rather than later before homes become too expensive. Keep in mind that sometimes there are programs which allow you to make up for lack of cash with other forms of collateral such as a car, wedding ring or furniture.
How much do you need to put down?
If you’re buying a home and you’re in the market for a house, Buy tips: how much money do you need to put down? This is a question that many first-time home buyers have asked themselves.
The answer depends on the type of house. For example, if you’re buying a condo, it’s about 10% of the purchase price, but for a detached house (a single family residence), this can be as high as 20%.
In order to determine whether or not you really need to put down any funds at all on an investment property, you may want to consult your broker.
For more information on calculating your down payment, see:
Don’t wait, start saving now!
Home ownership is one of the most important financial decisions a person can make. And while it’s thrilling to think you’re going to live in your own house, other people don’t always have the means to buy a home. And if they do, finding an affordable home might be tough.
That’s why beginning your saving journey now is so critical. As soon as you start saving money, you’ll better understand how to calculate the amount that will be necessary for your down payment and what you can do to ensure that it will be enough for a home of your dreams.
Set a savings goal and stick to it
A home is a big purchase that can easily get out of your control. One way to ensure you don’t lose your savings is to create a savings goal and stick to it. Once you’ve reached your savings goal, it’s time to put some money towards the purchase.
The point of having a savings goal is so that you don’t have any more surprises along the way. If you end up needing more money than originally planned, your savings will help ensure that you’ll be able to afford the home in the long run.
Know your rights
before you buy
It’s easy to feel overwhelmed by the thought of buying a home. But know your rights before you buy. In fact, there are special laws and protections that protect buy hacks from unscrupulous or fraudulent sales agents or lenders.
You have to be able to prove your identity and legal right to purchase the property. You’ll also want proof of income and assets when you’re applying for a loan.
Get creative with the collateral you provide.
Let’s say you’re trying to secure a down payment on a home close to your job. You want to do this without resorting to borrowing money from family or friends. What are some options you can use?
You could collateralize the sale of your car, furniture, or other items that are easily movable and transferable for up to 5% of the price of the house (or less if it becomes difficult or impossible for you to find alternative collateral).
This is another option for people who don’t have much cash on hand. It will help you get closer to the purchase price and save money in the long run.