How to Find a Down Payment to Buy Your Colorado Springs Home in Less Than a Year!
If you are looking to buy a home for sale in the Colorado Springs area, you will need a down payment. This amount is due at time of close and will come off the total amount of the loan you are getting to buy your home.
A recent Trulia.com article recently stated:
“Whether you’re trying to scrape by with 3.5 percent for an FHA loan or you’re planning to put down a full 20 percent, saving for a down payment might be the largest savings endeavor you ever undertake, after retirement planning.”
… read more: Seven Places to Find Your Down Payment
How much do I need for a down payment?
This amount varies depending on the purchase price of your home, your credit and what type of loan you are getting. Generally, the down payment is equal to a specific percentage of the sales price of the home.
Conventional, non-government loans, you will be required to have a 5%-20% down payment. [Conventional Loan Down Payment Info] For FHA loans, you will be required to come up with a 3.5% down payment in addition to any other up front costs (appraisal costs, inspection fees, etc.). [FHA Down Payment Information] If you are a veteran, you could qualify for a VA loan which means you may not have to have ANY down payment at all [VA Down Payment Information]
An median-priced home in Colorado Springs sells for about $210k. For an FHA loan, you’ll have to come up $7,350. For a conventional loan, you would need to come up $10,500 – $21,000.
Where can I find down payment money?
If you need (or want) to have a down payment to buy your next home, you cannot borrow this money, so here are some ideas on where to “FIND” the money.
- Savings– Broken down into 12 months, you would need to tuck away $613 – $3,500 a month for one year. How can you save this money? Consider cutting back on your lifestyle for one year.
- Quit smoking. This not only helps your health, but can help you add about $1,980 a year to your savings!
- Quit drinking: The average American spends 1% of their spending money on alcohol. Imagine how much “cutting back on alcohol” will add to your down payment!
- Eat IN. Americans spend an average of $2,500 a year “eating out”. Use your own stove a bit more for one year and add a huge chunk to your savings.
- Re-evaluate your cell phone and cable/internet plans. We recently saved over $100 a month by reconfiguring our cable subscriptions and cell phone plans.
- Sell Stuff: Use sites like Craigslist.org, Ebay.com and Bookoo.com to get some money for those old skis, unused jewelry, outgrown kids cloths/toys or anything else that you could SELL (instead of move).
- Get a second, temporary, job: Turn your free time into money by getting a temporary job. You could easily earn your entire down payment in just a few months of temporary, part-time work – especially during the holiday season when department stores are looking for extra help.
- Family: Consider asking your family members to help contribute toward your dream of home ownership.
- Government bonds: Sometimes there are government bonds available for home buyers to help with their down payments. These bonds are not always available and when they are, they go fast, so make sure you talk with your lender and be ready to fast when they come available.
A combination of these 5 ways can help you easily “find” your down payment, in less than a year!