Looking to Buy? 9 Essential Tips to Help You Save Money For a Down Payment

how to save for down paymentAre you a first-time homebuyer longing to own your very own home? Do you already have a home but are now ready to move closer to work, your friends, or both? We know you’re probably preoccupied with the location of your dream home and have driven by dozens of houses, daydreaming about throwing parties with your friends or just living your daily life in your new home. While finding the right house for you is essential, it’s maybe even more important that you prepare your finances first by getting money together for a down payment.

According to the National Association of Realtors, the national median home price in June 2013 was $199,999, and the prices are on the rise once more. A 10% down payment for a home of that price would be $20,000. While putting down a 10% down payment is ideal, it can be very hard to gather the funds for a proper down payment. After all, that means that you will have to save about $833 a month for the next 24 months in order to afford a home of that price.

Don’t worry – it’s not so impossible to save for a down payment for your home! Read on to discover 9 different ways you can save for that down payment in no time.

Create a Special Savings Account – This account should be totally designated for your new future home. If you have a separate account for your future home’s down payment, you can keep more organized and track your progress much more easily.

Cut Back – This might seem like an obvious thing to do, but a lot of people don’t realize that a lot of the little things in life can add up very quickly. Try to cut back on little luxuries right away. This could include expenses like your morning coffee run (don’t worry – you can brew some at home!) or eating out all the time. You can save so much money just by bringing your own lunch to work and making dinner at home every night – and it’s healthier for you as well!

Look Into State and Local Home-Buying Programs – You might be able to get some extra help on your money-saving journey. Check to see if your state, county, or local government operates programs for first-time homebuyers, veterans, and more. Some of these programs offer housing discounts while others can help you with down payment loans or grants.

Make It Automatic – After you’ve calculated how much money you need to set aside each month for a down payment, have that amount diverted from your paycheck into your special savings account automatically. By doing it this way, you don’t have to remember to deposit a certain amount of money after every paycheck.

Monitor Your Spending – Do you wonder at the end of each month where your funds go? Then it’s time to start monitoring your earnings more closely. You can save a lot by tracking your finances and cutting down on things you spend money on needlessly. Look into safe online apps like Mint.com to help you out!

Generate Money With a Hobby – Do you enjoy drawing, writing, doing crafts, or fixing others’ computers? You could very well have a source of income (no matter how small) that you haven’t tapped into yet! You can also try tutoring, teaching a sport, waiting tables on the weekends, or doing any other type of freelancing.

Cut Back on Student Loan Payments – If you have a heap of student loans to attend, you might be able to scale back a bit on payments, especially if those loans are backed by the government. Talk to your lender about repayment options; readjusting your pay rate can really help you save some money!

Put a Garage Sale Together – This is a quick and relatively easy way to earn a few bucks. Though you probably won’t earn enough to fund your entire down payment this way, you’ll be surprised just how much you can make by selling your old, unwanted stuff to others. It’s also less to pack when you get ready to move in the future!

Don’t Force the Issue – If you’re not able to gather all the funds you need to come up with a decent down payment or if you feel like you can barely afford simply buying a house, it might not be time to force the issue. Instead, just start saving money now until you’re ready to put forth what it would take to produce a down payment, purchase a home, and pay for maintenance, renovations, and insurance.

We hope that this list of tips will help you get the funds together more easily for the down payment of your new future home! Once you have your funds ready, come see the team who can help you find your dream home – The Massey Team at Berkshire Hathaway HomeServices Elite Properties. You can stop by to see us at our office, see our listings online at www.dianamasseyhomes.com, or call us at either (618) 791-5024 or (618) 791-9298.

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