Keeping the interest rates on your mortgage loan is key to a successful home ownership. Raising a substantial down payment, at least 20 percent, is a proven way of keeping the rates low when applying for a home loan in Phoenix, which institutions such as VIP Mortgage can help you with.
Unfortunately, more than 50 percent of the average homebuyers can’t afford to raise this much money.
Poor money habits often lead people to raise as little as 5 percent, which comes with additional cost. Here are some ways to improve your chances of raising a substantial down payment.
Goes easy on the credit cards
Reports show that an average American pays over $600,000 in interest rates over their lifetime. Now, put this sum into perspective. An average home is slightly over $200,000. You will have paid the equivalent of three homes in interest if you don’t limit your credit card spending.
Avoid charging small purchases such as take-outs on your card and pay for them in cash instead. Creating a budget and paying in cash is a great way to curb impulse buying and it makes you more conscious of your spending habits. Adhering to the budget lets you build a money-saving culture.
Stop buying into impressions
Keen to cash in the opportunities that come with emerging technologies, marketers make it their life mission to bombard you with adverts. If your resolve is not strong enough, you are likely to blow through your paychecks as soon as you can cash them.
It might also lead you to max out on several credit cards, leaving you buried under a pile of debt and no savings at all. The best way to overcome these temptations is to create a logical plan when making a purchase. Digging into the motives driving the desire to buy an item can give interesting insights.
For starters, weight the benefits of making a phone upgrade vs. retaining the current model.
Good money habits are the key to raising a substantial deposit for your dream home. Avoiding taking on to debt and watching your spending habits ensures that you hit the ground running.