3 Tricks For Hitting Your Savings Goal For A VA House Down Payment
If you want to purchase a home, you need to have some money saved up for a down payment for a VA loan. Putting money down on the home is a traditional part of buying the home. It shows the lender that you are invested in the home buying process.
1. Determine How Much You Need to Save
First, you need to determine how much you need to save. This will involve a few different factors. First, you need to figure out what size loan you might qualify for and could afford to pay with a 15- or 30-year mortgage. Second, you need to figure out what type of loan programs you qualify for. Different loan programs allow you to put down different sized down payments. The Veteran Administration loans are possible to obtain for no-money-down; however, putting at least five percent will shrink the overall size of the VA funding fees that you have to pay, and the more you put down, the more equity you'll have in the home right away.
For example, if you want to take out a loan for $150,000 and you plan on applying for a first-time homebuyer program that only requires you to make a 5% down payment, you only need to save $7,5000. Or if you want to take out a loan for $150,000 and go with a traditional down payment loan option of 20%, you would need to save $30,000.
As you can see from the examples above, the type of loan you qualify for can really change how much you need to save, which is why you should figure out what type of loan you plan to apply for and qualify for, so you can set accurate savings goals.
2. Create a Time Period for Hitting Your Goal
Second, you need to create a time frame for hitting your goal. If you want to purchase a home a year from now, you have twelve months to hit your savings goal. You can break your goal up into smaller units, such as a set amount per month.
Continuing the example above, if you needed to save $7,500 in a year, then you would need to save $625 per month. Or, if you needed to save $30,000 in a year, you would need to save $2,500 per month. You can break the goal down further, into a weekly or daily savings goal. Having smaller goals that you have to work towards as you reach your big savings goal can allow you to more accurately track your progress to your big goal.
3. Reduce Your Budget
Third, try to find ways to reduce your budget. It can be easier to reduce your budget when you know you are doing it for a set period of time, such as a year, and for a set purpose, such as savings for a down payment on your home.
When you find ways to reduce your budget, immediately funnel that money into your savings. For example, if you get rid of cable and save $100 per month, schedule that $100 to transfer into your savings each month at the time you normally would have paid the bill. Try to find small ways to reduce your spending each month and save that money instead.
If you want to save up enough money to purchase a home, you need to know how much you need to save. You need to create a time period for hitting your savings goals. You need to reduce your budget and funnel some of your money into your savings. With the right plan, you'll be able to save up the money you need to purchase a new home.
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