One of the biggest concerns first-time homebuyers often face is the question of a down payment. For many people, the down payment on a home is the largest single payment they will ever make.
The American Bankers Association offers these tips for help on saving for a down payment:
Establish a separate savings account.
Set up a separate savings account exclusively for your down payment and make your monthly contributions automatic. By keeping this money separate, you’ll be less likely to tap into it when you’re tight on cash.
Shop around to reduce major monthly expenses.
It’s a good idea to check rates for your car insurance, renter’s insurance, health insurance, cable, Internet or cell phone plan. There may be deals or promotions available that allow you to save hundreds of dollars by adjusting your contracts.
Monitor your spending.
With online banking, keeping an eye on your spending is easier than ever. Track where most of your discretionary income is going. Identify areas where you could cut back (e.g. nice meals out, vacations, etc.) and instead put that money into savings.
Celebrate savings milestones.
Saving enough for a down payment can be daunting. To avoid getting discouraged, break it up into smaller goals and reward yourself when you reach each one. If you need to save $30,000 total, consider treating yourself to a nice meal every $5,000 saved. This will help you stay motivated throughout the process.
Let American Federal Help!
American Federal Bank offers qualifying first-time homebuyers a variety of options, including down payments as low as 3%. We also offer fully forgivable down payment assistance of up to $5000 for those who qualify through the FHLB down payment assistance program.
An American Federal Banker can identify the best options and help you through the process of financing a new home. Our skilled and knowledgeable Bankers will help you determine the financial solution that best fits your goals. We are here to help you on your way to turning your dream of home ownership into reality!
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