Plan on buying a house in Charlotte? Try these 5 ways to save for a down payment
For many potential home buyers in Charlotte, the real estate market looks grim.
In April, the median home sale price in Charlotte was a record-high $393,344, the national real estate firm RE/MAX said in its latest National Housing Report.
With homes selling for thousands above asking price, putting money away for a down payment can seem like an impossible task. But there are ways to save so you get the best deal on your mortgage.
Use these five tips that can help you save money for a home:
Switch to a cheaper cell phone plan or refinance student loans
Minimizing expenses for things you already pay for can help you save money in the long run, according to NerdWallet, a financial advice website.
For example, you could compare car insurance rates to get a better deal, or switch to a cheaper cell phone plan, NerdWallet says. Refinancing your student loans to lower the monthly payments can also help you save.
If you’re one of the millions of Americans who spend money on streaming services like Netflix or Hulu, you could consider canceling some of your subscriptions if you don’t use them often.
Automate your savings account
If you have trouble managing money, you might consider setting up automatic transfers from your checking account to your savings account.
Keeping your money in a high-yield savings account, which has higher interest rates than a traditional savings account, can help you save for long-term goals, according to NerdWallet.
Transferring any money you get from tax refunds, bonuses or raises is also a good way to boost your savings, the money management site says.
Pay down existing debt
Using your extra income to pay down your debt can seem counterproductive when you’re trying to buy a home. However, one of the first things mortgage lenders looks for when they consider your application is your debt-to-income ratio, according to Rocket Mortgage.
Generally, having more debt means you’ll pay more in interest and have a higher down payment requirement, Rocket Mortgage says, but taking some time to reduce the amount you owe on credit cards, student loans, personal loans and auto loans can result in a better rate.
Use your side hustle to save
It’s never been easier to find a side hustle that will supplement your income, Rocket Mortgage says.
There are many sites like UpWork and FlexJobs that list jobs, where you can utilize your skills as writer, photographer, artist, or musician to earn some extra cash.
Driving for a ride-hailing company like Uber or pet sitting are also good ways to earn money when you have spare time.
Skip a vacation
The average family of four spends around $4,500 on vacation, according to Rocket Mortgage.
Although planning a getaway to the beach or the mountains can be tempting, skipping those trips and putting the money that you would spend on them toward a down payment can help you reach your goal faster.
In lieu of vacationing overseas, Rocket Mortgage suggests planning a staycation near where you live and exploring historical sites or trying a local cooking class.
Observer staff writer Mary Ramsey contributed to this report.
