Ready to purchase a home? For many aspiring buyers, the biggest obstacle is saving up enough for a down payment. It’s no small amount of money, and scraping it together can take both time and effort. Of course, it’s more than worthwhile if homeownership is your dream—and the process doesn’t have to be as painful as you might think.

If you’re ready to start saving up for your home down payment, here are a few tips to make the process quicker and simpler…

1) Know the requirements

You may have heard that you should make a 20 percent down payment when you buy a home. The truth is, you can often get away with putting down much less. For example: FHA loans, which are insured, often allow buyers to pay as little as 3.5 percent.

While making a lower down payment may help you get closer to your homeownership dream faster, there are benefits to putting down more. These advantages can include lower monthly payments, and the opportunity to avoid mortgage default insurance, among others.

2) Set a goal

The next step is setting a down payment goal. To determine how much money you’ll need, you should know what kind of home you’re looking for. A historic house in Bethesda will come with a different price tag than a modern condo in Urbana!

Once you know your specifications, it’s time to do some browsing. Try to get a sense of the price range you can expect, but be prepared for the market to change if saving up is going to take you some time.

3) Pay off your debt

Saving can feel pretty much impossible when looming debt is a part of your life. That’s why paying down what you owe is such an important early step toward meeting your down-payment goal.

The best place to start is with your high-interest credit cards. If slow-and-steady payments haven’t been working for you so far, you may want to talk to a financial expert. From consolidating what you owe onto one card, to opening a new line of credit, there are a few different methods for tackling this type of debt.

4) Set up automated savings

There’s no denying it. Saving up for a down payment is hard. Part of the challenge is setting aside money every time you get paid. That’s why an automated savings plan can be such an incredible tool.

Here’s how it works. A set amount will get withdrawn from your paycheque and put into a savings account. It will happen on a regular basis (you’ll choose how often), and the process will be automatic. You’ll be surprised by how quickly your savings grow when you don’t have to take this step manually!

5) Cut back on expenses

When you’re trying to put more money away, scaling back your spending is crucial. That means cutting down on those extra, day-to-day expenses that you may not think twice about most of the time. Whether that means eating less takeout or reducing your energy consumption, now is the time to make it happen.

One last piece of advice for those saving up for a home down payment. Be sure to look into whether you qualify for assistance. You can get more information on what’s available from the Maryland Department of Housing and Community Development here.

Ready to start your home-buying journey? If you’re thinking about making the move, get in touch to learn how we can help you through the process!

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