Saving for a Down Payment: The Ultimate Guide

saving for a down payment

Are you considering buying a house? Most lenders expect anywhere from 3% to 20% down for a home purchase, depending on the type of loan. If you haven’t already, you’ll need to create a plan for how to come up with the down payment. This might seem daunting, but with this simple guide to saving for a down payment, you can get started on your way to home ownership.

Set a Budget

Creating a budget is a great place to start when saving to put money down on a home, including your current income and expenses and the costs of the home purchase. Don’t forget to include closing costs.

Cut Unnecessary Spending

Reducing your spending is the easiest place to start saving, and there are many things you can cut out without a huge impact on your lifestyle, including eating out, excess entertainment expenses, vacations, and shopping.

Pay Down Your Debt

Your debt-to-income ratio is a significant consideration when you apply for a mortgage loan. Not only can it impact your chances for loan approval, but it can also impact your interest rate. And instead of paying your hard-earned money toward interest payments, put that money away to save for your down payment.

Take Advantage of First-Time Buyer Programs

Your lender can advise you on programs that help first-time homebuyers, including down payment assistance. A mortgage professional can guide you on the type of help available, the right loan for you and your financial situation, and how to improve your credit score to make you a good candidate for a loan.

If you’re in the market for your first home, don’t panic when it comes to saving for a down payment. Instead, contact the lending leaders at Midland Mortgage Corporation for the assistance you need to be on your way to homeownership.

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