Saving for a down payment for a house is no easy task, but fear not – it can be done. While down payment requirements vary by loan type, the more you’re able to save, the better. This can help with your loan approval, give you a better interest rate, and lower monthly payments.
Reach your homeowner goals with the following savings tips.
One of the easiest ways to start saving is to set up an automatic transfer to a separate savings account dedicated to purchasing your home. You can choose the specific amount and what days to have the transfer happen. Another option is to open and transfer money into a share certificate; you won’t be tempted to withdraw anything because of penalties and it’ll earn more interest.
If you’re really concerned that you’ll spend the money you’re saving to buy a home, deposit it into an account with a different financial institution so there are additional barriers to accessing the funds.
Save Extra Income
Have a bonus coming your way or having a garage sale soon? Stash those funds, plus any other extra income you receive, into your down payment savings account. Chances are you won’t miss it and it’ll be put to good use when you’re ready to buy your home.
You can even consider starting a second job and exclusively saving your earnings to boost your savings.
Skip Extra Spending
Depending on what your time frame is, it might be a good idea to skip a few vacations and coffee runs and save that money instead. Whether you realize it or not, the money you could’ve spent on extra items will add up quickly and get you closer to your goal.
However you chose to save for a home, be sure to set a time frame and stick to your plan. Save enough to cover the down payment and you’ll be on your way to homeownership in no time.
Looking for more guidance on the homebuying process? Learn all there is to know with free coaching from our partner, BALANCE. Start here >