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Tips for Saving for a Down Payment for a Home

Mortgage and Lending with First Priority Financial

Many renters may have the income to qualify for the payment on a home, but the tough issue is coming up with the money for the down payment.    And with the $8000 First Time Home Buyer Tax Credit deadline only a few months away,  you may be looking for ways to save money faster.  Here are a few great suggestion to help you save that down payment faster.

1.   Find out how much you can borrow from your 401K for a home purchase.piggy bank

2.  Ask family members if they can gift you money for a down payment.   While the full lump sum might be difficult for a single family member, maybe several members can spare a couple of hundreds dollars to help out.

3.  Ask your employer if they have a program to assist with a down payment on a home.

4.  Check your paystub and find out how much you are paying each pay period in Federal and State income taxes.   If you are paying several hundred dollars per pay period in Federal and State income taxes, why not revise your W4 withholdings as on January 1, 2010 and lower those taxes to almost zero.   Take that additional money and save it for your down payment.   Once the money is saved and the home purchased, you can revise your W4 again and start paying Federal and State income taxes again.

I have a client that is short a couple of thousand dollars for his down payment.   This client is paid weekly and is paying over $300 per pay period in Federal and State Taxes.   In less than 2 months, he will have the balance of his down payment saved.

What's the benefit to him?  He will be purchasing a home in the best real estate market in years, i.e. for a much lower price.  He will have tax deductions for his home interest and property taxes, and he will qualify for the $8000 tax credit.

Livermore Mortgage Broker

Pam Richerson
Maxwell AFB, AL

Thanks for sharing these tips Charity. 

Nov 12, 2009 10:41 AM
Darrell Backen
Darrell Backen 1.855.216.6010 - Vancouver, BC
Digital Marketing

Sounds like a good program.

Nov 12, 2009 10:43 AM
Kristen Wahl
Re/Max Plus - Rochester, NY

Great ideas, Charity! I'm reblogging this to share with my first-time buyers!!

Nov 12, 2009 10:51 AM
James K Barath, CMPS
Canopy Mortgage, LLC - Crown Point, IN
FICO Pro, Certified Military Housing Specialist

I would like to add one more and that is cut back on expenses. If home ownership is the ultimate goal, one must be willing to eliminate all unnecessary costs in the interim to build that down payment war chest.

Nov 12, 2009 10:52 AM
Patricia Aulson
Realtor - Portsmouth NH Homes-Hampton NH Homes

I've bookmarket this.....Good ideas for those who want to buy a home and need the down payment.

Patricia/Seacoast NH

Nov 12, 2009 10:52 AM
Sandy Wagner
RE/MAX Professionals 253.225.8322 - Gig Harbor, WA
Short Sale Specialist Tacoma, WA, and Gig Harbor,

Good ideas. I am going to send this quite a few people.

Nov 12, 2009 11:53 AM
Mike Morgan
Internet Marketing for Real Estate Agents and Brokers - Jensen Beach, FL

Great tips Charity.  We all too often ignore the renters.  Now with the $8,000 credit this is  hot market for us.

Nov 12, 2009 02:44 PM