11 Tips on How to Save for a Downpayment on a House

Owning a home is a milestone in a person’s life. However, it has not always been easy to accomplish. By learning some of the basics of homeownership and how to save for a downpayment, you will be able to make wiser decisions about owning a home. That’s why we asked experts from to share their tips for the most effective ways to save for a downpayment.

1. Withhold extra taxes through your employer

2. Cut down on costs

3. Setup a downpayment savings timeline

Saving effectively for a down payment requires precise planning, and that starts with understanding your budget. First, ask yourself a few questions:

• How much “house” are you looking to buy (what price range are you interested in)?
• Do you qualify for an insured mortgage, which requires only 5–10% down? Or will you need the minimum 20% down uninsured mortgages require?
• How long will it take to save your down payment?
• Based on your income, how large a mortgage do you qualify for?

4. Cut out your vices

5. Create a separate high yield savings account

6. Feed your separate account 10–20% of each paycheck

• Create a separate personal checking/savings bank account that is exclusively designed to protect and grow your money.
• Via automation (payroll deduction or auto-withdrawal), feed this account with 10–20 percent of your income every pay period; then, live off the remaining income from your checking account that is for personal/family expenses. — Greene Finance & Insurance

7. Refinance any existing debt

8. Understand what type of loan you’re eligible for

9. Determine how much you can afford to pay on a mortgage each month

Before you even think about buying a home or how much to save for a down payment, you must determine how much you can afford to pay on a home each month. Ask yourself these three questions.

• How much of a monthly payment can you afford? The rule of thumb for monthly payments is that they shouldn’t exceed 30% of your monthly gross income.
• What savings do you have available for a down payment? Down payments range from nothing to 20%, with most buyers falling in between.
• How do I plan to cover other expenses such as the closing costs? Have you saved up money for them?

It is a good idea to start saving up for them as soon as you can. Set aside a special account at a financial institution and start adding to it regularly. Make sure this amount is a part of your budget if you decide you want to buy a home. — Financial Fitness Group

10. Look into downpayment assistance programs

Look into any programs out there for down payment assistance. You’d be surprised how many administrations out there will assist you if you qualify like, Veterans Administration and Federal Housing Administration. — Financial Helpers.com

11. Review, repurpose & redirect, revisit, reach-out

• Review your prior 24 months of financial transactions (debit card, credit card, savings, and retirement).
• Repurpose wasteful spending (unused memberships, subscriptions, etc.) into savings by redirecting the money flow to build up your down payment savings account.
• Revisit this process to check your progress and manage your household cash flow.
• Reach out for help if you’re not seeing the results you need. -B. Brandon Mackie, CFP, Felton & Peel

Originally published at https://www.redfin.com.