5 Ways to Save for a Down Payment

A Scripted Freelance Writer Writing Sample

Housing experts have no trouble identifying the biggest hurdle to home ownership: the down payment. Saving up tens of thousands of dollars is no small task, especially when other, more immediate needs constantly crop up. Below are five tips to help you save for a home of your own.

1. Look Into Home Buyer Programs

Most states have programs that provide down payment assistance for first-time home buyers. That means prospective owners can often put down a much smaller share of the total home value, say 4 or 5 percent, rather than a typical down payment, which can be as much as 20 percent of the purchase price. The US Department of Housing and Urban Development provides a useful database of programs in each state.

2. Separate Funds

If all your money is lumped together in a single account, it becomes easier to spend your savings. Separate your down payment fund from your checking account and, if possible, from other savings accounts as well. That way you don't accidentally draw on the fund to cover basic needs, and it ensures that you're sticking to your contribution goals.

3. Set Up an IRA Account

There are some savings vehicles that won't penalize you if you withdraw money for home purchases. An IRA is one such option. If you're a first-time buyer and you've weighed the costs of pulling from your retirement fund, you can opt to withdraw up to $10,000 without penalty to help buy a house.

4. Use Direct Deposit

If your company provides direct paycheck deposit, you can usually allocate portions of your salary to be automatically deposited into different accounts. Designating a specific share of each check for your down payment savings account will lower the chance that you skimp on your monthly or bi-monthly savings goals. Since you never see the money, you might not even think about it at all.

5. Manage Your Debt

If you've been paying off a bevy of credit card balances and student loans every month, it might be time to start managing your debt more actively. You can potentially refinance some of your debt for lower interest rates and lower monthly payments. You can also try lowering your student loan payments by extending the repayment term. Both options can give you a quick cash boost each month to help you reach your savings goal more quickly. Saving for a home requires discipline and sacrifice, but it doesn't have to be a stressful endeavor. By educating yourself about programs and best practices, you can stay in control of such a large financial decision, and you'll be able to set -- and achieve -- reasonable goals.


Professional writer and editor with 10+ years of experience. Specializations include writing about business, economics, and financial matters. I hold a BA in Economics and Political science from Columbia University and a Master's in Journalism from Northwestern.

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