Five Ways to Save Money for Your Down Payment

Five Ways to Save Money for Your Down Payment

Waiting for the best mortgage rates before buying a home can be a good idea. But how can you be ready with that down payment when the mortgage rates are at a low?

Saving money for a down payment is often an obstacle for many first time home buyers. In fact, it may be such a stumbling block that many people just forget about buying their own home because they cannot come up with a decent down payment. There are some everyday things, however, that you can do to save money and put it towards a new home. Follow these tips to get your down payment started right away!

Quit Using Paper Towels
Paper towels can eat away at your grocery bill and cost up to $10 per month depending on how sparingly you use them. In a year, you would be spending $120 just on paper towels that get thrown away. Instead of using these, use old rags and towels to do the job that paper towels used to do. If you simply cannot do without paper towels, at least hang them over your sink's faucet so they can dry and you can use them again. It puts more money in your pocket and helps the environment at the same time.

Use Online Publications
If you added up the amount of money you spend on magazines and newspapers in a year, you may be surprised. Even if you only buy a newspaper every day at 50 cents each, that's still over $180 a year ... and that's not counting the Sunday paper! You can get all of the same information if the paper has an online edition. Many magazines also have online publications with all of the same articles and information. As a bonus, it's not taking up space in your office or house when you use online editions and you can easily save just the parts that are of interest to you.

Rent Instead of Buy
I'm talking about DVDs, of course. Most people buy DVDs of movies when they first come out and they watch the DVD one time and it goes on their shelf to collect dust. If you buy an average of four DVDs a month, that's almost $1,000 per year you could be spending on something that you will only use once and end up selling in the future for a fraction of what you paid. Instead, use Netflix or some other service and save a ton of money that you can put towards your down payment.

Turn in Your Change
If you're like most people, you have containers of change sitting around your house. Take some time each year to count that change and put it into your savings account to put towards your home's down payment. You may be surprised how much you have just laying around.

Turn Off Your Heater
Instead of turning your heater up in the winter to feel warm, take it down a few degrees and put a couple extra layers of clothing on or bundle up with a cozy blanket. You could save $50 or more a year by simply dropping it down a couple degrees and you won't even notice the difference in temperature.

Of course, just using one of these tips or a couple of them won't help you put together a sizeable down payment. But using many tips together and making some lifestyle changes will add up over time and you can jump into buying your home when the mortgage rates are at a low. We'll have more money-saving tips for you in future posts!

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