Guide | Home Buying
Tips on Saving for a Down Payment
Saving for a down payment just takes some tracking and organizing. Plus, don’t forget to celebrate what you achieve along the way.
SET A REALISTIC GOAL
The first step to buying a home is determining an affordable down payment amount. Researching home prices and creating a budget can help you narrow down which homes are in your budget. A home loan specialist will be able to help estimate the down payment amount needed once you choose the right home for your family.
SET UP A SAVINGS PLAN
Whether you collect change in a jar or manually set aside a portion of each paycheck, setting up a regular savings plan is a good way to grow a down payment.
USE YOUR FUTURE HOME AS INCENTIVE
Reaching your goal can be hard work, but keep in mind that it will all be worth it on move-in day. Posting a photo of your dream home in a high-traffic area like on your refrigerator or as a screen saver on your mobile phone so you see it multiple times a day can help you keep your eye on the prize and persevere.
EVALUATE CURRENT SPENDING
The best way to save money is to cut unnecessary costs. Make a prioritized list of your current monthly spending habits and cut back or eliminate unnecessary expenses, such as eating out or unused memberships that require a monthly payment.
USE YOUR TAX REFUND
If you’re getting a tax refund and considering buying a home, you may want to use the money toward a down payment. You can create a down payment fund by setting up a separate saving account. The more you put down, the less you must borrow.
EARN EXTRA INCOME
This is not always an option for everyone, but working overtime or picking up a parttime job can provide extra money to put toward a down payment.
RESEARCH VARIOUS FINANCE PROGRAMS FOR ASSISTANCE
The Federal Housing Administration support loan programs in every state that are designed for first time homebuyers and those with low to moderate income. These programs require some type of homebuyer contribution, but they’re worth considering. Information about government down payment assistance programs can be found on the HUD website: https://portal.hud.gov/hudportal/HUD?src=/buying/loans.
CELEBRATE YOUR ACHIEVEMENTS
The path to meeting your savings goal can seem daunting and impossible. Avoid getting discouraged by breaking your goal into several smaller goals. Each time you meet a small goal, reward yourself! For example, if your end goal is $15,000, for every $2,500 you save, treat yourself to dinner and a movie. You’ve earned it!
Article | Home Buying
Article | Homeownership
Article | Home Buying
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