Ways to Help Save for a Down Payment
The first hurdle to home buying for many prospective buyers is a down payment. Saving for a home down payment is more like a marathon than a sprint. Meeting your savings goal can take months—or even years. Especially for first time home buyers, a mortgage down payment may seem out of reach; however, with a plan in place, you can get closer to the closing table.
Make a Budget
The first step to saving is to know what you’re spending! List all of your expenses and create a budget to follow for each line item. Ensure you know where each dollar goes to make every penny count. In this step, you may find places where you can cut spending easily or discontinue any unnecessary subscriptions.
Know Your Timeline & Create Goals
Goals, goals, goals! Once you know your monthly budget, you can establish a general timeline with some daily, weekly, or monthly saving goals based on the leftover income in your budget. Make sure to set realistic goals that work for your unique situation. It’s important to create milestones—and celebrate them! This helps to keep you motivated and encouraged during your savings journey.
Your timeline and goals should align with the type of home loan you’ll be getting. Different loan types have varying requirements for down payment amounts and often depend on your credit score and lender. You can speak with one of our mortgage professionals to learn more about loan types you may qualify for.
Pay Off Debt
Did you know paying off debt can help you save? Though it seems counter-intuitive, paying off debt can actually help you reach your savings goals quicker. By paying off debt— especially high-interest debt—you’ll be able to remove those items from your budget and redirect those funds to your savings plan.
Paying off debt can help your credit score, too! When it’s time to secure your mortgage loan, a higher credit score may allow you to put less money towards your down payment. It’s a win-win!
Shop Around for Down Payment Assistance Programs
If you meet specific criteria, you may qualify for down payment assistance programs. These programs vary by state and often have restrictions based on factors such as income, disability, credit, or military status. Some programs offer affordable down payment rates, while other programs may offer down payment assistance.
Start your journey to homeownership today by creating a savings plan that works for you! Take a look at our calculators and resources page to see your estimated mortgage payment and what you need when applying for a mortgage loan. Give your local mortgage lenders at Coastal Custom Mortgage a call today to learn more about preparing to purchase a home!