Tips for Budgeting and Saving for a House Down Payment

Prior to buying a home, you need to assess the amount and source of your down payment funds and check in with a lender of choice to determine what kind of loan is best for you. You should work on getting your credit score as high as possible and create a reasonable budget so you can save the needed down payment funds.

There are down payment assistance programs that will help keep the size of your down payment to only 5 percent of the purchase price.

Plan on buying a home that fits your savings plan of an amount equal to 5 percent of the price. You can always move up to a larger home later as your equity grows.

It is not uncommon for all or part of a down payment to be gifted from a family member. This option may allow you to buy a home sooner than expected because your funds are immediately available.

To help save money to buy a home, have your bank set up an automated transfer of at least 10 percent from every paycheck to a separate account that is reserved for your down payment funds. Have your budgeting plan include reducing some of your more luxurious indulgences. Eat out less often, shop for more affordable getaways and evaluate how much you are spending on items you could really live without.

If you can find a way to increase your income, even if only temporarily, your down payment fund will grow even more quickly. You may have a hobby that could be a marketable commodity, or freelancing your skills could supplement your income.

Reach out to learn how you can put yourself in the best possible position to purchase a home.