Buying a House: How to Save for a Down Payment
Whether you’ve been ready to begin the next step in life as a homeowner for a while, or you think homeownership is a potential milestone for your future, it’s a great idea to start saving for the down payment as soon as possible.
Once you’ve laid out the time frame, saving for a home becomes manageable.
Here are a few ways to start saving for a down payment.
Reduce higher interest rate debt.
One of the ways you can find extra dollars to start putting towards your down payment savings, is by reviewing the interest rate on your debts. If you find the majority of your high interest rates reside in your credit cards, consider a balance transfer between your current high interest rate credit cards and one with your credit union.
Research first-time home buyer programs.
Depending on where you plan to live, there may be a first-time homebuyer program in your area. Many financial institutions offer a first-time home buying program with special rates or that require a smaller down payment amount. Your credit union offers a wonderful First-Time Home Buying experience online, including rates, financial calculators, and the your home loan application all in one place.
Temporarily eliminate unnecessary expenses.
Between the monthly subscriptions available to us through our apps and the internet, there may be a few items you’re paying for that you may not “need” while you save for a down payment. Review your monthly statements to see where your paycheck is being spent and make a few choices to what you might be able to live without while pursuing your dream of homeownership.
Have a garage sale.
This is the perfect time of year to purge items in your current living space that you can sell at a community garage sale or post online for purchase. While this may not get your down payment savings in order, it’s a great way to supplement your savings and gives you a head start on what you may not want to take with when you move into your new home.
Take on a temporary, second job.
If your schedule allows time for a second job, this is a beneficial way to accelerate saving for a down payment without adjusting your regular paycheck. You can streamline your earnings from your second job to your down payment savings account.
Track your great savings work.
There are many creative ways to track your savings progress, such as sharing it on a calendar or on a separate savings graph. It’s proven when you see the progress of a savings plan, it can boost your motivation to stay on track and encourage your good savings habits. (This tip can also be applied to any debt repayment strategy you may have!)
Ready to start saving for a down payment? Here are some saving options:
Transferring funds to a separate savings account.
Transferring funds directly into a separate savings account is a great option for saving towards a down payment. You can decide on contributing a fixed amount or a percentage of your paycheck to this savings.
Pro-tip: When you open an account at American Eagle Credit Union, you automatically open a savings account with 5 dollars, so it’s easier than ever to transfer funds from checking to savings. Open your account today.
Open a CD savings account.
Certificates of Deposit (CD) are a safe, secure way to get a good return on investment. With competitive rates and special rate bonuses available, CDs are another great option for growing your down payment savings.
Open a Money Market account.
Money market accounts are a flexible, secure way to save for a down payment and earn higher interest rates as your balance grows, with interest compounded daily on balances of $1,000 or more.*
Get more information on Money Market accounts.
Saving for your dream home can become a reality with your credit union. Ready to become a homeowner? Open an account with American Eagle Credit Union to get started. Questions about first-time home buying? Contact our friendly, knowledgeable Mortgage Loan Officers by calling 1-877-236-4179 or through our contact form.
*Money Market Account interest is compounded daily and paid monthly. Interest is not compounded on days the daily balance drops below $1,000.