Saving Money For Your Down Payment On A House

September 22, 2010

Saving up for a down payment for a house can seem like a daunting task. Gone are the days of 5% down and no income verification for mortgages. You now need to focus on the many ways that will help you save money for a down payment on your home.

Cash gifts that you receive from either a wedding or other occasions should always be set aside. Selling valuables is another great way to come up with money you might not otherwise have. You can sign up for an eBay account and auction off all those things that are just lying around gathering dust.

If you find that you are prone to spending the money in your savings account, do not link the account to a debit card as this will make it much harder to access the money. You should also consider opening an online savings account, as they tend to pay higher interest rates and are also FDIC insured.

Here is some specific advice to get your started:

  • Wedding gifts are a great way to save up. Many people give money as a gift for newly married couples. Instead of spending the money, consider putting the money away towards a down payment on a new house.
  • Save other monetary gifts. If you have parents or relatives who give monetary gifts, use that money to save as well. Instead of cashing the check or spending the cash, take a one-way trip to the bank and leave the money safely in your account.
  • Enroll in an automatic savings plan. Have your employer direct deposit a set amount each pay period into a separate account reserved just for a down payment fund. It may take a few years to save up for a down payment. Don’t be put off by this fact; rather take the time to make a list of everything you want in a house and use that as a good motivator to save up for the right house.
  • Sell off any valuables you are willing to part with. Some items in your household may be worth a couple hundred to a couple thousands of dollars. Why not put these items to use and sell them for a profit? Use the profits to build up your nest egg. Not willing to part with your valuables? Not a problem. It cannot hurt to get an appraisal and keep it on hand for future possibilities.
  • Downsize your budget. Take a good look at your expenses and see what you can cut back on or eliminate completely. A little bit of sacrifice will go a long way in helping to build up your savings toward achieving home ownership.
  • Saving up for a down payment on a house can be a seemingly daunting task. Also be sure to read my other articles about Savings. It does not have to be difficult; and with a little bit of determination and perseverance you will find yourself well on the way to owning your own home.

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