Posted
on Monday, June 3, 2024
in
Mortgage Lending
First National Bank Offers 6 Tips to Save for a Down Payment In Recognition of June as American Housing Month
When considering buying a home, the down payment you put upfront plays a major role in your future housing expenses. According to the Consumer Financial Protection Bureau, the amount you save can greatly influence your interest rate, monthly housing payment, and also your need for mortgage insurance. As you prepare for the home buying process, First National Bank is highlighting six tips to help you cut the extra costs and save a substantial amount for your down payment.
By responsibly managing your spending and allocating extra cash to a savings account, you will be on the right track towards saving for your home purchase.
- Develop a budget & timeline. Start by determining how much you’ll need for a down payment. Create a budget and calculate how much you can realistically save each month – that will help you gauge when you’ll be ready to transition from renter to homeowner.
- Establish a separate savings account. Set up a separate savings account exclusively for your down payment and make your monthly contributions automatic. By keeping this money separate, you’ll be less likely to tap into it when you’re tight on cash.
- Shop around to reduce major monthly expenses. It’s a good idea to check rates for your car insurance, renter’s insurance, health insurance, cable, Internet or cell phone plan. There may be deals or promotions available that allow you to save hundreds of dollars by adjusting your contracts.
- Monitor your spending. With online banking, keeping an eye on your spending is easier than ever. Track where most of your discretionary income is going. Identify areas where you could cut back (e.g. nice meals out, vacations, etc.) and instead put that money into savings. Using the free Card Management, you can monitor your debit card spending habits and gain valuable insights into your budget.
- Look into federal, state and local home-buying down payment assistance programs. First National Bank's mortgage lenders can help you navigate these valuable down payment assistance programs that provide loans or grants.
- Celebrate savings milestones. Saving enough for a down payment can be daunting. To avoid getting discouraged, break it up into smaller goals and reward yourself when you reach each one. If you need to save $30,000 total, consider treating yourself to a nice meal every $5,000 saved. This will help you stay motivated throughout the process.
First National Bank is dedicated to supporting homeownership opportunities for all communities and affordable rental markets. Contact one of our mortgage lenders to begin exploring the down payment assistance programs and how to get prequalified for a loan before you start your home search.
You are also invited to visit First National Bank's First-time Homebuyers Hub, which includes helpful resources and calculators, and a free, downloadable version of the First-Time Homebuyers Guide.
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