The COVID pandemic has had on-going and far-reaching consequences across the globe. One of those consequences being an economic downturn unlike any other and different segments of the economy are being affected in different ways. Despite a rising unemployment rate, real estate, especially in Denver and Colorado, seems to remain on a healthy upward trajectory. Interest rates are low and people continue to relocate here in droves from the coasts, the Midwest, and certain southern states of the country. This dichotomy, between an unstable economy and a robust real estate market, makes saving for that precious down payment all the more difficult and all the more important.
To ease the burden, we wanted to share some tips from ReColorado for first-time homebuyers that should help you save where you can and reach your financial goals. But, before you begin, it’s important to know what you are saving for and how much you need to save. Yes of course you are saving for a home, but what home exactly and where. Familiarize yourself with the price points in the neighborhood you wish to live. Doing your research, on your own and with Corken + Company, can help you focus your attention and approach the process realistically. In addition, you should account for the other factors that may affect your down payment and monthly mortgage payment including interest rates, loan terms, and closing costs. A standard down payment target is about 20% but again, through conversations with your lender and realtor, you can explore other options and develop a saving strategy with your particular target percentage in mind.
Having a clear financial goal and a way of tracking your progress will hold you accountable to reaching it. And now, for some money saving tips to help get you there…
1. Consolidate your monthly bills. Are there any you can eliminate or reduce? Think unused subscriptions and possible new promotions to take advantage of for your phone or cable bill.
2. Consider going generic. Many brand name things are more expensive simply because of their label. Are there any brand name household cleaning products, food products, or toiletry products that have a generic replacement? This may seem like a small change to make but lots of small efforts will compile to create big results.
3. Stay home. It’s a good idea in more ways than one. Sacrificing eating out and doing costly activities for a period of time can help you save a hefty sum. Get creative! Cook and find new ways to have fun that are free. If you remind yourself it is only temporary, you might find it a fun challenge.
4. Budget. Allocate a certain amount of money to be spent each month and what it is to be spent on. Then, of course, the bigger part is having the discipline to stick to that plan and make sacrifices when you need to.
5. DIY. The more you can do yourself the better. Cleaning your house, walking your dog, and washing your car are all things you can accomplish yourself and pretty much for free.
6. Prioritize. Of course, other desires and even unexpected obligations will always pop up during your journey to save. Be patient with the process and remember your ultimate goal. If it is not a financial obligation, weigh this new opportunity against the opportunity to own your own home.
And, if you need any help deciding what to save or changing spending habits, please reach out to Corken + Company for more information. With two decades of experience, we offer real estate solutions without limits. Don’t let saving for a down payment stand in the way. We can do it together and get you in your dream home in no time!