The Down Payment

Easy Ways To Help You Save 

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The housing market is on fire! Low interest rates have led to a spike in buyers envy for many. If you are among them, you know planning for the down payment is high on the list of priorities as it determines whether PMI (property mortgage insurance) will come into play, your interest rate, and the overall principle amount you’re financing. Saving for that initial down payment can seem like a daunting task and setting aside five figures can be tough. Here are some easy ways to help you save:


The first step to buying is to find out what you can responsibly afford in a home purchase. Once you have been pre-approved, a home buying calculator can assist in identifying what your monthly payments would be at each price point, and your goal amount to put down. Know your limits– just because you were approved for it, doesn’t always mean you will be financially comfortable at that budget.


Once you know your goal savings, the next step is to figure out how much you can realistically contribute each month. This can also determine how long it will take you to save up your full goal amount. Whether it’s $50-$300, the money you save can help lower your PMI, interest or monthly payment.


One way to speed up the savings process is to invest part of your savings into stocks. While investing into stocks is a riskier option than keeping your money in a savings account, it can greatly accelerate your earnings. This also means you don’t need to save quite as much to reach your end goal. Choose a stock that diversifies your holdings minimizing your risks. Don’t invest your entire savings amount, but rather 20-25%, that way you will still be protected if the market were to take a plunge.


The best option for buying a home is still the traditional 20% down. This alleviates you from private mortgage insurance which can strain your overall budget. If 20% down is just not realistic, consider other housing programs that require a much smaller sum like an FHA program.

A structured savings plan and a bit of financial discipline will easily land you on the right path to homeownership!