Saving for a Down Payment – First Time Buyers

3 Simple Ways for First Time Buyers to Save for a Down Payment

Although many experts encourage buyers to make a down payment of at least 20%, saving that much for first time home buyers is tough.  Large down payments have advantages such as lower monthly mortgage payments, and lower interest rates.  Here are 3 ways to maximize a down payment.

  1. Stick to a Spending Plan – Create a flexible spending plan.  It not only helps you see where your money goes, but also helps you see where cuts can be made.
  1. Put your Money in a High-Interest Savings or Money Market Account – Make your money work for you! Check with your bank or credit union to learn more about their high-interest savings options.
  1. Tap into Your Retirement Savings Accounts – If you are a first-time buyer in the U.S., you may be able to borrow up to $10,000 from your IRA to put toward your down payment.

Some statistics from the National Association of Realtors 2014 Home Buyer Profiles:                                    47% of first-time buyers saved for their down payment in less than one year.                                                   6% was the down payment amount for the typical first-time buyer

 

 

 

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