Effective Ways To Save For Your Down Payment

A lack of finances for a down payment and closing fees is one of the top reasons why non-homeowners continue to rent. However, covering these costs is not impossible. Your first-home down amount may be closer than you think.

5 Ways To Save For Your Down Payment

Here are practical ways you can do to save your down payment:

1. Put Your Savings in a Place Where You Can Generate Additional Money. Before you begin putting money aside, consider the best place to keep it. Compare high-yield savings accounts, money market accounts, and certificates of deposit. While traditional CDs have penalties for early withdrawal, this may be advantageous in this case: with the additional restriction in place, you may avoid the tendency to dip into your down payment savings for other expenses. But keep in mind the deadline. For example, if you want to buy a house in the next two years, you should look into 18-month CDs. You’ll have an extra boost if you decide to buy even earlier.
2. Request a Pay Increase. If you are in a position to do so, ask your employer for a salary increase. You may have to request a raise by a specific date or even give your employer a set amount of time to respond. You will have to decide how far you are willing to go in this process and how much you are ready to ask for. There is also the option of putting a freeze on your salary. This means you will not be able to negotiate a salary increase for a certain period. You can also ask for a one-time raise.
3. Refinance Your Mortgage. Some people are already repaying their mortgages as opposed to making monthly payments. If this is the case, you may want to refinance your mortgage. By refinancing your mortgage, your monthly payments will be lower, and you will pay less interest. You will also have the opportunity to get a better interest rate. At this point, you can decide to refinance your mortgage if you are comfortable and know what you want to do with your new mortgage payment.
4. Assess Your Spending. Assessing your spending can be complex because you may be spending more than you should. This will help you make a plan as to how you want to spend your money. You can approach this by asking friends and family members to help you get a list of the things you spend money on. You can also ask your bank for a credit report. This will tell you where and what you are spending the most.
5. Look For Down Payment Assistance Options. Some first-time home buyers are eligible for down payment assistance programs. These programs are offered on a state-by-state basis. You can also check in with your state’s housing and community development department. Some states offer grant programs, while others offer loan programs. The grant program can be awarded to low or entry-level home buyers. In addition, you may want to look at the state and local incentives you may be eligible for. This could include the RESPA loan program.

Your Team at MidAmerica Bancorp

Your down payment may be much lower than you think. As a first-time buyer, your goal will be to accumulate enough savings to cover any closing costs. This will allow you to move forward with purchasing a home. Depending on the state and your lender, you may be eligible for down payment assistance programs.

Make sure you take advantage of any programs that are offered to you. This will allow you to qualify for a down payment while saving money.

Seek professional help and contact MidAmerica Bancorp. We provide a variety of mortgages with low down payment choices for first-time and repeat homebuyers. Contact us today at (708) 237-4050!