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.
- 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.
- 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.
- 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
