How to Save for a Down Payment

By NationalMortage.com Staff

There once was a time when you didn't need a down payment to buy a home or you could find home mortgage lenders to put down over 90 percent of your mortgage. With the recent housing bust, we know those days are over. However, you can still get the home of your dreams; you just have to save up for it and NationalMortgage.com has the useful tips to get you started.

1. Get another job. Of course, this doesn't apply to everyone, but if you can, get a second part-time or weekend job. If you are a writer, consider freelancing online or even waitressing or working in your local coffee shop for some extra money. Every time you are paid put that money away and pretend it isn't there. Better yet, start a free ING saving account where you place your money and you'll be amazed at how your money starts to grow – meaning more money for your down payment.

2. Start a savings account. Ok, we all know that you have to save in order to have a house, but the thought of saving is very different than actually doing it. Consider opening a separate or sub account or place your money in CD where you put a fixed amount of money, say $100, into the account every month. While your money is in the account, it will accrue interest, usually around 5 percent that will continue to grow and help you save money for your home.

3. Oh, holidays. If you get any sort of cash gifts from family members or friends from a college graduation, wedding or birthday; put the money away. This "free" money can quickly add up when put into your saving account or CD.

4. Thank you, Uncle Sam. For some people, tax season is dreaded, but for others, it might mean major bucks are coming your way. If you receive a refund, and we mean any sort of refund whatsoever, put a large chunk of it away. Of course, a small purchase is fine but the quicker the money is out of sight the better.

5. Budget. Budgeting can't be touted enough, which is especially crucial if you want to make a major investment like buying your own home. Make a list, over the course of the week, of how you spend your money. Do you buy lattes every day? Do you use that 70-dollar gym membership? Seemingly innocent purchases add up, which makes it difficult to save for a home. Looking at your list, consider what you can cut out -- maybe start by buying two lattes a week, instead of five or try not buying new clothes for a month. Whatever your spending vices are consider what having your own would be like in comparsion to having your own home. Whatever your spending vices are consider what having your own would be like in comparison to having your own home. Whatever your are cutting back on; stick to your plan and place the "extra" money in your CD or savings account, as you slowly, but surely watch your money grow.