Determine Your Down Payment Goal
The minimum down payment amount is determined by the final price of the home and the specific loan program you’ll be using. You can meet with a Loan Officer to help you determine how much you can afford and how much of a down payment you will need.
Pro Tip: On average, first-time buyers are putting down between 6%-9% (NAR). A larger down payment can significantly lower your monthly mortgage payment and make your offer more competitive in a strong market.
Create a Monthly Budget (and stick to it)
Once you have your total savings goal, set a realistic timeframe (e.g., 24 months). Use this simple equation to calculate your savings target.
Monthly Savings Goal = Total Savings Goal / Number of Months
Breaking the large goal into a manageable monthly savings goal makes it easier to stick to and achieve. It’s important to remember that this needs to be realistic and in line with your income. Closely review all your monthly expenses to find opportunities to save more.
Open a High-Yield Savings Account
Your down payment money should be safe and accessible but still working for you. A High-Yield Savings Account (HYSA) is the perfect place for your funds. It offers safety (FDIC insured) and a competitive interest rate compared to a standard bank account, ensuring your funds grow faster.
Explore Down Payment Assistance Programs
Don’t assume that you must save every dollar towards the down payment yourself! Many state and local agencies offer Down Payment Assistance (DPA) programs and grants to make homeownership more attainable and affordable. The benefit of working with an experienced local lender is that they are familiar with the DPA programs available in your area and can determine what would work best for you.
Saving for a down payment required discipline, but by sticking to a solid plan and working with a team you can trust, homeownership is an achievable reality.
If you know you are ready to begin your homeownership journey, connect with a loan officer to discuss your situation, how much you should save, and your best next steps.
