6 Tips for Saving for Your Down Payment
Saving enough money for a down payment is an achievable goal with a solid savings plan. Typically, 5 to 20 percent of the home’s value is needed for a down payment. Use these simple strategies to make saving for a home easy:
- Develop a budget & timeline
Start by determining how much you’ll need for a down payment. Create a budget and calculate how much you can realistically save each month – that will help you gauge when you’ll be ready to shop around or make a purchase. Using a tool like Money Manager can help you establish a goal and keep track of your progress.
- Establish a separate savings account
Set up a separate savings account exclusively for your down payment and make your monthly contributions automatic. By keeping this money separate, you’ll be less likely to tap into it when you’re tight on cash. You can Open an account online in just a few minutes.
- Shop around to reduce major monthly expenses
It’s a good idea to check rates for your car insurance, renter’s insurance, health insurance, cable, Internet or cell phone protection plans. There may be deals or promotions available that allow you to save hundreds of dollars by adjusting your contracts. For example, many of these services are included with a ValuePlus. If you have a ValuePlus Checking account, there may be services you are paying for elsewhere that you could cancel.
- Monitor your spending
With BankPlus’ Money Manager, found in online banking, keeping an eye on your spending is easier than ever. Track where most of your discretionary income is going. Identify areas where you could cut back (e.g. nice meals out, vacations, etc.) and instead put that money into savings.
- Look into state and local home-buying programs
Many states, counties and local governments operate programs for first-time homebuyers. Some programs offer housing discounts, while others provide down payment loans or grants. Contact someone from our mortgage team to see what programs you may qualify for.
- Celebrate savings milestones To Avoid getting discouraged on your savings journey, break it up into smaller goals and reward yourself when you reach each one. If you need to save $30,000 total, consider treating yourself to a nice meal every $5,000 saved. This will help you stay motivated throughout the process. Use these Savings Calculators to map out your goal.
Source: American Banker Association