How to Start Saving for A Home Down Payment

Posted by Rebekkah On June - 9 - 2016 0 Comment

A down payment is a  large amount of money that everyone eventually needs to save up for. It can be very hard to save up a large amount of money for a down payment, especially while having to pay for other life necessities. Down payments take a while to save up for, so the earlier you start saving the better. Follow this list of steps and advice on how to start saving money for your new home!

Down payments are very important as they can determine your future finances and payments on your home. The higher the price you put down, the lower your mortgage rate will possibly be. In a way, you want to pay a larger amount on your down payment to avoid paying other home payments in the future.

The first step to start saving for a down payment is to figure out how much money you need to save to buy the house you want. You also need to consider how much time you have to save up the money. Usually, new home owners put 20 percent down on their new homes. People can obviously save more than 20 percent, but 20 percent is usually how much is needed for a down payment. Use this down payment calculator to estimate how much you should be saving.

Once you figure out the amount you want to save, the second step is to start a savings plan. Here are a list of some saving techniques that might work for you:

  • Automatic transfers from your checking accounts to your savings account
  • Saving the extra money you earn at work
  • Saving your tax refunds
  • Save up your change in a jar
  • Visual savings chart – show yourself how much money you have already saved and how much more you need to save to reach your goal. Visualizing your savings amount will help you stay motivated to save your money.

After figuring out a saving method, the third step is to look for other resources that can help you out with saving for your down payment. The only downside to this is that when you tap into other resources, you can be pulling money from other future finances. Only consider this step if you really need the help to save up money or if your time frame is short.

The fourth step is to look into investing. Investing can help you save additional money rather than just saving cash money and spare change. There are many ways to get into investing including buying stocks and penny stocks.

This post has been contributed by Coldwell Banker – Hubbell Briarwood, a Lansing Real Estate Company. Check out their website for more information.

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