Tips On How To Save For Your First Down Payment On A House
If you thinking about purchasing a home in the near future, you need to start planning and thinking ahead! Saving for a new home is not an easy task and can become difficult as there are many things that can distract you from your primary goal.
Saving for the down payment on a house is usually the number one thing that prevents potential homeowners from being able to purchase their dream home.
Here are some tips and tricks to help you save:
1. Determine how much money you need to save
First, you need to figure out what type of mortgage you want. This is important as different types of loans require different down payment amounts. As an example, conventional mortgages require at least 20% down payment,whereas, FHA and VA require 3% or 5% down.
After you decide on your loan type, start researching about the initial amount you will be required to pay as a security “ i.e down” payment.
2. Open a savings account online
In order to start saving for the down payment, you should put your money in a savings account. This account should not be touched and ideally, should be kept separate from your other savings accounts. Keeping the accounts separate will help you keep an accurate account of how much you have, as well allow it to accrue interest in that account.
Tip: To keep a continuous draft of money, you should set up an auto transfer each week or each month to electronically transfer a set amount of money from your checking account into the savings account.
3. Determine your time frame
If you plan to purchase a home in the next few months or even in a year, you should compute how much you need to save each month to reach the targeted down payment. Naturally, your savings goal will be higher if you have a shorter time frame to cover.
4. Adjust your budget
It is 100% possible to save up for your down payment if you formulate a budget. There will always be bills to pay, however, cutting back on some of your expenses or temporarily cutting unnecessary spending can help you reach your target early.
Buying a new house will require time and effort; however, walking into your dream home is priceless. If buying a home is important to you, it is smart to educate yourself about the various down payment programs as well as down payment assistance options that are available.
WE CAN HELP!
United Financial Counselors, a not for profit organization, in conjunction with our lenders is proudly announcing a 100% down payment financing program for home buyers. If you are interested in this program, call us now at 877-509-3160 or schedule an appointment online at