While the idea of buying a home might be exciting, the prospect of coming up with a down payment can be daunting, especially for buyers entering the market for the first time. However, there are many ways to come up with that down payment that might surprise you. Read on to learn some unexpected means to save for that down payment so you can become a homeowner sooner.
Automate Your Savings
Having the intention to save up for a down payment is one thing, having the discipline to do it is another. After all, it is a lot easier to spend $20 here or $100 there on things throughout the year than it is to remember to earmark those funds for a big purchase down the road. Automating your savings is a great way to help you save more without having to even think about it. Talk to your bank about transferring a fixed amount into a special account each month right from your paycheck. If you never see the funds as available, it can be a lot easier to save up. Even better, see if your bank allows you to label and name your accounts. Having an account named Down Payment instead of a bunch of random numbers might be just the visual cue you need to leave your savings alone for the long term.
Find Creative Alternatives
It’s common knowledge that the best way to boost your savings is to curb your spending, but how can you decrease the amount of money you spend without feeling the pinch? Find affordable alternatives, of course! Take stock of things you love the most (and consequently spend the most on) and find less expensive alternatives to help reduce your monthly spending. Instead of that expensive cable package, opt for streaming services. Instead of buying books and movies, head to the library once per week. If you enjoy dining out with friends, host a weekly potluck or dinner party instead. You’ll be socking more money away for your down payment before you know it.
Shop for High-Yield Accounts
When you started saving up for your down payment, perhaps you started a new savings account to hold all that cash. However, it might be beneficial for you to move your existing savings into an account that offers more interest that will build up faster. Instead of your traditional savings account, consider a high-yield savings account and don’t be afraid to shop around to find the best account for you. However, be sure to also consider fees and rules that might erase any potential gains. If you are still a long way away from buying a home, consider placing your funds into a certificate of deposit account. These accounts have a higher interest rate for a set period but beware, once you place your money in these accounts, you shouldn’t touch it again until it matures.
Look for Down Payment Help
Your down payment will likely be the largest sum of money you ever spend all at once, but it doesn’t all have to come out of your pocket! North Carolina has resources that can help first-time and move-up buyers boost their down payment savings to help them purchase homes they can afford. The NC Home Advantage Mortgage™, administered by the NC Housing Finance Agency, offers down payment assistance up to 5% of the loan amount and lenders statewide. First-time buyers and military veterans may be eligible for an $8,000 down payment boost with the NC 1st Home Advantage Down Payment.
Learn all the ways the NC Housing Finance Agency can help make home ownership affordable for you at www.nchfa.com/home-buyers.
