A home is almost certain to be the largest personal purchase you make in your lifetime. While you may have the ability to make your mortgage payments once you’ve purchased a new home, pulling together enough money to cover the down payment and closing costs can be a challenge. Here are some tips for coming up with the cash needed to purchase your first home:
1. Develop a savings plan. If you aren’t already using a household budget, put one together. Once you have paid off any high-interest debt, such as credit cards, set aside the same amount for savings each month.
2. Apply your tax refund. Put the money immediately into your savings for your new home.
3. Capture any windfalls. Whether it’s a bonus from work, a check in the mail or any other payment out of the ordinary, set the money aside.
4. Make automatic contributions. If your salary is deposited electronically, have a set amount deposited into a savings from each payday.
5. Trim the fat. You will be amazed at how even small items can add up over time. Pass on the fancy coffees, the new clothing , the lottery tickets or whatever else you’re spending your money on. Put it into savings instead.
6. Reduce your monthly bills. Are you paying for a gym membership you never use? Could you get by on a less-expensive streaming package? Evaluate your monthly bills and look for items you can eliminate or reduce.
7. Dine in. You can still almost always save money by preparing your own meals at home.
8. Refinance your vehicle. Check with your credit union or bank to see if they can offer you a better rate. Put the difference into your savings.
9. Avoid impulse buys. If you are going to make an unplanned purchase, do not do so unless you match the amount with a deposit into your savings.
In addition to everything you can do to save, speak with a loan officer about programs specifically designed to help first-time homebuyers get into a home without a large cash outlay.