In the last century, the required down payment for a home purchase changed significantly, decreasing from 50% Save your moneyof the price to 20% to as little as $0.  Recently, though, banks have started to ask for more.  For most homebuyers, without a special deal through an organization like Nehemiah, 3% investment is the bare minimum.  Here are 5 ideas that you can use to save for your new home.

  • Got a 401(k)? Today, more and more employers are offering this tool for retirement savings. Some even give free matching money for participating.  Make sure you're saving at least enough to get all the free money you can.
  • Direct Deposit = Direct Savings  Consider having part of your weekly pay deposited straight into a savings account - some banks might even pay a higher rate that way!
  • Got a Raise? Pay Yourself First  Next time you get a pay increase, instead of spending it, instead put the extra earnings into savings.  You're living without it now, you'll do fine without it later, and you'll have a nice nest egg to boot.
  • Know When to Get Advice  There are professionals who specialize in helping you reach your goals. Use their knowledge to help make the path to your dreams easier.  Email me for a referral. 
  • Lower your Tax Withholding  Sure, it's great to get a nice check from Uncle Sam each February, but keep in mind, he's not paying you any interest on your money he's using each year.  Increase your exemptions to free up cash flow. 

Dollar SignImplementing a plan can make saving for a new home much easier.  No matter which of these ideas you choose (or even if you choose another), make a plan and stick to it.  Set a tangible goal - "we want to save $10,000," for example - so you know what you're striving towards.  When you get there, you'll have the satisfaction of knowing you made it.

And, with your savings and FHA or conventional financing, you'll be eligible to get a great deal on a home. 

 

4 Comments on How to Save for Your New Home: 5 ways to build 3%

APR
04
2008
3 Featured Posts

Wow!  I can't believe it's been a month since I've posted.  I hope you find this information helpful.

Dan
1:36pm • #1
125,884 Points
Good information.  It's going to take some time re-educating consumers to the fact that they will need some down payment.
1:38pm • #2
2 Featured Posts
Why would I need actual money to buy a house?????  Just kidding!!  Consumers are going to have adjust to not having access to 100% financing, but I think having to save up the 3% is a good thing for most people.  Nice post.
1:40pm • #3
1 Featured Post
Great I hope you posted this publicly as well as within the Active Rain community. 
1:41pm • #4


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Dan Hartman

Providence, RI

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Province Mortgage Associates - NMLS #2861

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