Tips to save for a down payment on a home.
Saving for a new home can be intimidating, especially if it’s your first time in the game. If 20 percent of the price of a home seems like a lot of money, that’s because it is! The median price of a U.S. home in 2014 was $188,900, meaning a traditional 20 percent down payment works out to nearly $38,000. That type of down payment can be a daunting goal for many Americans with limited extra funds to spare at the end of the month. Saving for a down payment isn’t impossible—it just takes some work. Check out these six tips on saving for a down payment.
Brown bag it
Everyday purchases can really add up. Purchasing coffee from a chain and eating out for lunch can run the average American upwards of $3,600 a year. That’s a lot of money that can be put towards your home. Don’t worry—we aren’t expecting you to cut out caffeine altogether! Try homebrewed coffee and bringing your lunch to save you a little extra money each week.
Cut the clutter
Take a look around your home — how many household items do you have lying around that you don’t use? Cutting the clutter in your home by having a garage sale has a twofold benefit; you’ll get cash and have a clean, organized house. With garage sale season upon us, now is a great time to consider cleaning out your house and using that cash towards your down payment.
Get a hobby
What are you good at? Handcrafted items are big right now and sites like Etsy prove that there is an audience waiting to buy. Whether it’s sewing, woodworking or jewelry making, put your talent to use and make some extra money while doing something you enjoy.
Automate your savings
You don’t miss what you don’t see, right? Take that logic and put it towards your savings. Auto draft a percentage of your paycheck into savings and watch your funds climb. You may notice the difference at first, but before long you won’t miss the money coming from your paycheck.
Track your progress
Track your progress visually. People are generally visual, so set a goal and create a graph or other representation of your savings to stay motivated. Be sure to put the savings tracker where you will always see it to remind you of your progress.
Look into home-buying programs
Northwest offers a lot of great programs for homebuyers with low down payment options. Programs such as our First Time Home Buyers Program, Affordable Home Loan Program, and others are designed to help you get into your dream home. Call or visit your local Northwest office for more information on how we can help you.
Saving for a home shouldn’t be a struggle. Northwest has mortgage programs available to help. Take advantage of our speed, convenience and expert advice. Visit our mortgage page to learn more about how Northwest can put you in your dream home.