Tips: Save for a Down Payment
Owning your own home is the American dream. But for many first time homebuyers, a hefty down payment can be a significant obstacle, if not a downright nightmare.
Don’t despair. Mortgage rates are still low, and home prices are attractive. With a little perseverance, you can save the down payment you need. Here are a few tips:
Financial stability is key.
Remember, slow and steady wins the race. Expect to be saving for the long haul. Put aside a designated sum from each paycheck in a separate savings or checking account. Turn it into a game to see how much you can save every month.
Examine your spending.
Consider giving up just one treat each month or more frequently – a coffee drink, Friday night movie, tickets to the big game or that new pair of designer stilettos – to help pump up your total. Accelerate your savings by lowering your spending to the minimum level possible.
Make lifestyle changes.
Consider downsizing your current living arrangement or moving back home, if that is an option. Drive a car with a lower car payment, or carpool.
Do your homework.
Work with a reputable lender to find out the price of a home you can easily afford and what the down payment will be. Look for a home under your budget to allow yourself a financial cushion.
Know what you need.
Down payment requirements vary, depending on the lender and the type of loan you have. Ask your Realtor® or Pardee Homes New Home Specialist about assistance programs for first-time homebuyers.
Find out if gifts are an option.
Some lending institutions allow parents or other loved ones to make a gift of a down payment. If you have relatives willing to do this, check with your lender.
Take a photo of your dream home, or cut out photos from a magazine. Place them where you can see them every day – your bathroom mirror, your refrigerator or your dresser.
Be your own cheerleader.
Positive reinforcement can be a powerful tool. Write notes to yourself – “Future homeowner!” , “I can do it!” or whatever works for you.
Identify other sources of income.
Be creative. Use your skills and talents to make money. Start a cleaning, organization, pet care or housesitting business on the side. Sell crafts. Hold a garage sale. Babysit. Sell your gold.
Celebrate successes, and don’t give up!
Saving for a down payment is a journey, and the success will be that much sweeter when you accomplish your goal.
Pardee Homes’ New Home Specialists can help. Connect to learn more about HomewardBound, our credit enhancement and repair program, or to find just the right home for you.