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Home ownership is a goal that many people feel is out of their reach because they can't visualize how they'll pay the down payment on a house, but it is more possible than you imagine.
A Down Payment on a House May Be Easier Than You Think
Typical down payment on a house
Down payments can range from 20% to 3% with 13% being the average.
When a homebuyer has a down payment on the lower end, they have usually gone through an assistance program like the FHA, VA, or USDA and will have to take on loans and insurance costs to consider in addition to their house payment.
This eliminates the issue many potential home buyers have of not knowing how they can afford a large sum at one time, though they can foresee making the monthly payments.
Don't stress about not having it right away
You may hear the words down payment and think that if you don't have money saved now or can't see having the down payment in the very near future that owning a home is out of the question for you.
Most people save up their down payment. And it often takes people a year or more than five years to do so.
Can you visualize yourself saving money over a span of multiple years?
Keep in mind that with lower down payment rates, you might be talking about saving $6,000.
How to Save for a Down Payment on a House
There are many things you can do to help you save for a down payment on a house.
Open a savings account and either put money in it every month or have it automatically deposited from each check. The latter helps people who particularly struggle to save rather than spend.
Reduce your debts, particularly the ones with higher interest rates.
Look for ways to lower expenses. Consider eliminating things that you would like to have but are not as important to you as your potential new home, like vacations or all those little payments for monthly streaming accounts and other services that add up to large expenditure without you realizing it. In that same vein, you may not realize how much your favorite coffee drink is costing you each month. Designate a certain period of time to cut back or eliminate these costs to see how much you can save during that time so you can reach your down payment goal.
Look for ways to make money on the side, cash back credit cards, babysitting while working from home, taking on a part-time remote job to supplement the income from your full-time job, etc.
Sell investments and luxury possessions if their worth would better serve your interest in home ownership.
Set goals. It is disheartening to keep putting little bits away and have months or a year pass and realize that the amount you have saved is sadly lacking. You can vary the amount you save so you put something away each month, but set a goal for each month and ensure you meet it more often than not so you can see rewarding results.
Also, be aware that you don't have to save all of the down payment on a house. If you can get money from a family member, friend, or church, you can use "gifts" to help you pay for your down payment.
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