8 Ways To Save Money For A Down Payment- As if searching for the right home isn’t stressful enough, new homeowners also have to plan on coming up with enough money for a down payment on their new abode. When you’re a first-time home buyer, this task can seem to be especially daunting. But don’t worry – we’ve come up with eight ways to drum up enough funds for a down payment on the house of your dreams.
Here are a few tips for saving for a down payment:
- Crunch some numbers. Start by doing some math to get a general idea of what kind of sum you’ll need to begin saving for. Once you narrow down your target neighborhood, contact a real estate agent to get an estimated average cost of a home in the area, then plan on saving 20 percent.
- Record your spending. Plan out where your money will be going for each paycheck. Budget all of your expenses and be sure to set aside a chunk each month for your down payment.
- Join an automatic savings plan. This is the easiest way to make sure a portion of your money is set aside each month for your down payment. You determine a specific amount to be taken out of your account each month and placed directly into a savings account for your down payment. If it’s not in your account, you can’t spend it, right?
- Shop around to lower your monthly expenses. You can save money by lowering the amount you spend each month on utilities and other bills. Do your research and find the best deal in your area on cable, car insurance, cell phone carriers, etc. and the savings will add up.
- Check your IRA. First-time homebuyers can get up to $10,000 from an IRA without having to pay the standard 10 percent early withdrawal fee. Find out more at irs.gov.
- Look into state and local home-buying programs. Your state, county or local government may have special programs for first-time homebuyers. Some programs offer housing discounts while others provide down payment loans or grants.
- Refinance your debt. You can refinance more than just your mortgage loan. Do your homework and see if refinancing can get you a better rate and give you a lower monthly payment.
- Cut back on student loan payment. If your loans are taking over your finances, you may be able to scale back on your loan payments, especially if you have government-backed loans. Talk to your lenders about your repayment options and see if there is a way to lower your payments in order to make room for your down payment.
With these tips in mind, you’ll have enough saved up in no time. Happy saving!
Do you have experience saving up for a down payment? Do you have tips of your own? Send them our way by leaving a comment below!