Saving for a Down Payment

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    Before you can make the transition from either renting to owning or even before you buy a new house for your family, you will need to have a substantial down payment. Typically, you will need to put down between 10 and 20 percent of the home's value.

    Develop a budget and 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 transition to your new home. Our free MoneyLink tool can help you determine what you spend on a monthly basis and can easily help you establish and keep a budget. Click here to learn more about MoneyLink

    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. 

    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 plan. There may be deals or promotions available that allow you to save hundreds of dollars by adjusting your contracts.

    Monitor your spending

    With MoneyLink, keeping an eye on your spending is easier than ever. The spending analysis tool allows you to track where most of your discretionary income is going. Identify areas where you could cut back (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.

    Celebrate savings milestones

    Saving enough for a down payment can be daunting. To avoid getting discouraged, break it up into smaller goals and reward yourself when you reach each one. If you need to save $30,000, consider treating yourself to a nice meal every $5,000 saved. This will help you stay motivated throughout the process.