Ideas for saving for a house down payment

When looking to buy a home, it’s best practice to put down at least 20 percent. While it is possible for some lenders and states to offer loans with less than 20 percent down, FHA loans and VA loans, but these options might not be available for you if a certain criteria isn’t met.

For many home-buyers, saving enough to reach a 20 percent down payment seems like an insurmountable number. A higher down payment will lower your monthly mortgage payment, and there is no rule against putting down more than 20 percent. In fact, the more you put down, the more likely you will be able to negotiate for the lowest possible mortgage rate.

Remember, you can also deduct mortgage interest payments on your income tax returns. If you are buying a $220,000 house with 20 percent down, your down payment will be $44,000.

I have some great suggestions to get you on the road to saving a big chunk of cash so you are ready when your dream home comes along. Calculate your approximate down payment and then dive into saving for your future!

Downsize current housing

Lowering your current housing costs is a great way to save lots of money fast. Rent an extra bedroom, move in with family or friends, or rent a smaller apartment.

Make a hobby earn you cash

Have a hobby that you can turn into some extra cash? Give tennis lessons, do freelance work, use your photography skills, buy and sell vintage furniture, the options are endless.

Host a garage sale

Clean out old junk and host a sale in your neighborhood. Get more people on your street to join in for extra foot traffic.

Shop around for great prices

Be sure to call your insurance companies, cable and internet plans, etc to see if you can lower your plan or if there are any discounts available.

Put a check on online spending

Online spending can overrun a budget quickly. Putting a hold on online spending can help you cut down on discretionary spending.

Part-time work

Consider taking on a part time job, or freelance work, or even add extra hours on your daytime job. Every little bit helps and putting in extra hustle makes a huge difference.

Cut back on student loans

Talk to your lender regarding the repayment options available. Adjusting your payment could substantially cut your monthly payments.

Automatic savings plan

After determining how much you can actually afford to spend on a mortgage, start saving via an automatic savings plan. For some people, saving the difference between a current rent payment and a future mortgage estimate is a great start. For others, saving a designated amount every month is a great choice because they might not yet be able to afford their dream home, but want to start planning in that direction.

Save every day (by not spending every day)

HUGHES » PAGE 2

A major key to successful saving for any reason is to simply stop spending in unnecessary ways.

When tempted to splurge, stop and remember your goal of your dream home. Put the spending on hold.

Save every $5 bill

Every time you receive a $5 bill in change, set it aside into savings. Or, every time you make a purchase, round up $5 and put that extra $5 in savings.

Need more suggestions?

• Eat out only once or twice a month;

• Stop smoking or drinking;

• Buy used books on Amazon instead of new;

• Request a credit card rate reduction;

• Downgrade to a cheaper cell phone bill;

• Cancel cable for one year; • Make coffee at home; • Buy all generic grocery brands;

• Cancel unnecessary subscriptions;

• Don’t hire anyone for tasks you can do yourself (house cleaning or lawn work);

• Walk or cycle to work, if possible.