Saving for a Down Payment – Useful Ideas

When considering becoming a homeowner, one of the decisions you can make that will be beneficial to you is to deposit a down payment. However, the question is how do save up that hefty down payment?

One of the biggest roadblocks for prospective home buyers is securing a down payment. Fortunately, though, technology seems to be playing a huge factor in shrinking the burden of down payment. The whole saving process has become quite a bit less rigorous.

Below is a list of how you can overcome the down payment hurdle and ensure you have enough money when it’s time for you to buy.

Save A Fixed Amount Every Month

Saving a fixed amount is the simplest and most convenient way to save money. Open a savings account and discipline yourself to pay in a certain sum into the account every month. Discipline yourself not to use the money for any other purpose aside for your down payment.

Reduce Expenses

Save a lot more than you spend, review your expenses and cut down on items that are not necessary. Whatever money generated as a result of this should be added to your down payment account.

Skip Vacations for A Year

I know going for a vacation during the year is something you are looking forward to and you have it all planned out. However, if you are looking to save up enough money for your down payment, then you should consider scrapping out vacation until you have enough money for your down payment.

Reduce Your Debt

Having a credit card with a high interest rate can limit your ability to save. Pay off your interest debt starting with the highest; after that, you can close off that card while you proceed to pay off the next.

Borrow from Your Retirement Plan

You can ask human resources or your payroll officer if it’s possible to borrow against your savings to buy a home. Many profit sharing setups make provisions for employees to loan a certain amount from their retirement plan to become a homeowner.

Borrow from A Relative

When it comes to getting a home of your own, most family members and relatives would be willing to help; they can grant you loans without interest, gifts and other non-monetary items that will help you in your down payment quest.

Get Another Source of Income

Getting a second job would mean you would probably be working round the clock, but in the long run, it would pay off. Getting another job means another source of income and more money to save into your down payment accounting.