6 Tips to Save For Your First Down Payment
by Abby Meirndorf, Marketing
You’ve finally reached a vital point in your life: you’re ready to save up for your first mortgage down payment. If you’re a young adult who may have some debt built up, you need to be careful. Here are some things to think about when saving for your first down payment:
- Cut out the small stuff. Don’t go out to eat, cook more at home, and pack a lunch when you go to work. Cut back on buying clothes, your daily coffee habit, or going to the movies. Your wallet will thank you!
- Get preapproved. You want to make sure that you are able to qualify for a mortgage at all! This will also give you a good idea of your overall budget and the amount of money you’ll need for the down payment. However, start saving well before this point to build up your reserves.
- Time frame. When do you want to move into a house? Figure out how long you want to wait and then develop that savings plan.
- Figure out a savings plan. If you’re buying with another person, talk with your them to determine how much you can each save per paycheck or per month. Take a percentage of your paycheck and put it into a savings account and do not touch it. If you’re doing it on your own, carefully track your spending habits and save as much cash as possible — be disciplined!
- Garage sale. Get rid of things you do not need. Every penny counts towards saving for your first home.
- Reduce student loan payments. If you are a recent college graduate and are still trying to pay off your student loans, see if you can reduce your monthly payments. This way you can put some extra cash into your savings plan but still afford to stay on track with your loan payments.
The biggest thing to think about is the savings plan. You have to be willing to cut out the luxury expenses and really be smart with your money. It may be difficult at first, but in the long run it will be worth it. Remember to stay focused on your goal and to avoid the temptation of spending your money on those everyday coffee runs.
If you have purchased your first home, what advice would you give to young adults on saving for the down payment? Leave your tips in the comments!