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Grow Your Down Payment Savings Faster!
It all starts with a commitment to save. It's the most important thing you can do to prepare for homeownership - saving for a down payment. The more you can contribute (or "put down"), the more attractive your loan will be to us. In addition, you'll borrow less, which means you’ll pay less in interest expenses over the life of your loan.
So how much of a down payment will you need? That depends on the purchase price of the home you would like to buy and the type of loan product you choose. The down payment is a percentage of the home's purchase price, and different loan products require different minimum down payments. If you can put down at least 20% on a conventional loan, you will qualify for the regular interest rate. If you can only save 10% of the purchase price, your interest rate will be .50% higher than the regular interest rate. Ask your loan specialist whether a lower down payment will qualify you for a lower interest rate and determine whether this is a good option for you.
Qualifying for the Down Payment Savings Plan
There are several steps you can take to get your Down Payment Savings Certificate of Deposit (CD) started. Or if you've already been saving, there may be ways to help grow your down payment faster.
First - Talk with one of our knowledgeable Home Loan specialists
Getting a professional opinion on your ability to qualify for a home loan could help you figure out where you stand and set goals for your future. Aroostook Savings & Loan will sit down with you and discuss your goals and needs. We can then gather some information and let you know what the appropriate amount may be for you to save over time based on the home you would like to purchase. Contact one of our Home Loan specialist today and schedule an appointment with Beth Henderson or Iris Pelletier at 498-8726 in Caribou or Patsy Ouellette or Rebecca Rouse at 764-6591 in Presque Isle.
Tip: If you will be paying more for a mortgage than you would in rent, one smart strategy to jump-start your savings is to "try on" a potential total monthly mortgage payment: 1) work with your Home Loan specialist to estimate your projected payment (including mortgage principal, interest, taxes, and insurance, as well as any additional fees such as water and sewer fees); 2) then subtract what you are currently paying in rent from this amount; and 3) put the difference in a savings account every month.
• Let's say your projected mortgage payment is $850, and your projected increase in utilities is $200.
• Your current rent is $600.
• So the increase you would expect to pay as a homeowner is $450. That's the amount you
would put into your Down Payment Savings CD each month, to "try on" the payment.
Second - Set up a down payment savings account
After you have met and discussed your home buying needs and savings goals with one of our Home Loan specialists, they will recommend a Down Payment Savings CD plan that provides a monthly deposit you should make of a certain term. Once your recommended monthly deposit and term has been determined, your Home Loan specialist will open up a Down Payment Savings CD with the required initial deposit of $200.
Third - Continue adding to your savings
There are several ways you can add small amounts to your Down Payment Savings CD on a regular basis so that saving becomes part of your routine:
• Every time you deposit a payroll check, transfer a little to your
Down Payment Savings Certificate of Deposit.
• Have a predetermined amount automatically deposited every week or month
from your checking account.
• Cut back on some luxuries and deposit what you would have spent (say, on a new jacket or
an expensive meal) into your Down Payment Savings CD instead.
• Use a gift. A family member or other person may give you a monetary gift for your birthday
or graduation. Take all or a part of the gift and deposit it in your Down Payment Savings CD.
Finally - Explore your home buying loan options
Once you get closer to realizing your Down Payment Savings’ goal and purchasing your new home, an
AS&L loan officer will assist you in any questions you may have about the home buying process and can
help you prepare to get your mortgage by prequalifying you for a home loan.
Since Aroostook Savings and Loan believes in homeownership and wants to assist you with that process, we are paying an interest rate that is higher than a certificate of deposit with the same term. In addition, if you reach your Down Payment Savings CD saving’s goal by the maturity date, you may be eligible to receive a Bonus of $1,000 plus 100% interest earned through maturity date towards closing costs or down payment at the closing of your Aroostook Savings & Loan mortgage. It’s our way of contributing to help you with the additional cost of buying your home.
It’s as easy as that… call and schedule an appointment today to see if you qualify for this manageable and very rewarding Down Payment Savings Program that will help make home ownership a reality for you!
Beth Henderson or Iris Pelletier at 498-8726 in Caribou
Patsy Ouellette or Rebecca Rouse at 764-6591 in Presque Isle
*APY is Annual Percentage Yield. Interest is compounded continuously. $200 minimum deposit to open and earn stated APY. A penalty may be imposed for early withdrawal. The stated APY is accurate as of April 27, 2016 and assumes funds will remain on deposit until maturity.