First Time Buyer Tips: Saving for a Down-payment

When planning your home purchase, you need to figure out your budget. To obtain an accurate home buying budget we look at monthly payments and down payment. The larger down payment you are able to put down, the less you will need to put toward monthly payments. Rocket Homes has a few tips to help you begin saving for your down payment:

Automatic transfers:

Create a special savings account just for your down payment fund. Instead of just saving what is leftover in your checking at the end of the month, set up an automatic transfer from your checking to your “down payment” savings account. This will make it harder to spend since it will be out of sight, out of mind.

Make a budget: 

It is very easy to spend your entire paycheck. A $5 treat here and there add up quickly. Having a budget can help keep you focused on your goal. If you spend your allocated going out budget, it’s time to spend time at the house. With the goal of a down payment, perhaps you make a stricter budget and the cuts go into your down payment savings account.

Remove big ticket items: 

Cutting smaller areas of your budget, like eating out and getting coffee, can definitely help your savings add up. However, sometimes larger cuts may be necessary when saving for your home. Perhaps you forgo your annual trip and plan a stay-cation instead.

Remember the goal: 

It can be tough sticking to your budget and forgoing some events in your saving process. It is critical to remember why you are making these decisions. Help yourself remember the goal by posting photos of your dream home around the house. Every time you add to your down payment fund brings you one step closer to walking through the door of that dream home.