Houses are expensive, and saving money to buy a house can take years. In fact, the average sales price of a new home was $346,400 in January 2021, according to U.S. Department of Housing and Urban Development (HUD).
Follow this guide to discover the five ways to save money for a house:
1. Save extra money:
Any overpayment on your 2020 tax return, or an unexpected year-end bonus from your employer, are all excellent options to start saving for a down payment on your new home purchase.
2. Take advantage of low to zero down mortgages:
Work on your credit score to take advantage of the best interest rates and compare all your mortgage options. Taking advantage of low or zero-down mortgages can help you make a home purchase without a large outlay of cash upfront.
3. Make use of your retirement plan:
Retirement plans are a great way to grab money for your mortgage, and many plans have a penalty-free option just for mortgages.
4. Find a roommate:
If you pay rent all by yourself, you might consider getting a roommate. That way, you can split your monthly payment, utilities, and other recurring expenses in half, and put the money you save in an interest-bearing account.
5. Cut back on non-essentials:
One of the best ways to save for a mortgage is to consider cutting back on everyday expenses, like gym memberships, magazine subscriptions, streaming services, and dining out.