Posted in: First time homebuyer tips, Buying a home, Getting a mortgage

Ways to save money for a down payment

Down payment saving tips

When you are interested in buying a house, there are many things you should consider before you even start your home search. One of the biggest things to think about is how you will pay for the home's down payment. The credit information website Quizzle has come up with a list of tips on how to save money for a down payment when purchasing a home in Minnesota.

According to the site, the first thing you should do is get a copy of your credit report, which can be provided for free using online services. Knowing your current credit report will help you better estimate the loan amount for which you will qualify. Obtaining a copy of your report early will also give you time to start working on improving your scores if needed. The source reports you may need to pay down some debt before you can truly begin saving for a down payment.

Next, compare your monthly income to your expenses to know what you can afford to set aside without compromising other bills. Depending on how frequently you get paid, you may find yourself being able to set aside an entire paycheck or a large portion of a paycheck each month.

If you don't already have a budget, it's advised to create one and set goals based on your current debt and expected living expenses. By eliminating unnecessary purchases and cutting back on pricey habits including eating out and shopping, you can put that extra money towards your savings.

Carrying cash can also help reduce the amount of money you use. Studies show consumers spend less when carrying cash versus a debit card. Additionally, by paying for items in cash, accruing debt which can come from high-interest credit cards. 

Saving up for a down payment can take years, but by determining your budget and sticking to your goals, you'll soon be able to imagine yourself as a homeowner.

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