Introduction to Saving for a Down Payment
Follow us on a journey to discover your purchase power and buying speed
Hello there! Welcome to our 4-part series on saving for down payment. Faira has put together a set of short articles to guide you through the reasoning behind saving for down payment: why, how much, how to do it. We have a downloadable Excel spreadsheet that you can use to calculate everything with your own numbers. Let’s get started!
Part 1: What is the maximum you can afford? This is an important question because it will give you a general notion of your purchase power. Even if you don’t want to stretch yourself and go for the maximum, it’s important to know it so you figure out how much room you are giving yourself.
Part 2: High savings “diet” for down payment. After knowing the limits of your wallet, it’s time to work on your buying speed. We’ll show you a high savings goal you can shoot for and a framework to pursue it. The closer you can get to it, the more flexibility you will have when opportunities arise.
Part 3: What if I lower my down payment? This is a very common and natural question to consider. There’s no definitive right or wrong answer here, but we’ll help you understand how purchase power and buying speed can be traded. You’ll be able to figure out how to strike a good balance for you.
Part 4: How debt affects your home purchase. Almost everyone has some form of long-term debt. Student loans, car payments, credit card debt, you name it. Your purchase power might be affected or not, but the good news is that there are things you can do about it (besides paying it off, of course).
There’s also a bonus article with a step by step guide to help you make full use of the spreadsheet calculator. After you finish this series, you should have good knowledge of where you stand, what your goals are, how you plan to get there and how long it will take.