Down Payment Savings Strategies

Whether you’re a renter ready to become a homeowner, or a would-be move-up buyer, saving for a down payment on a house can be a challenge. Depending on your timeframe, how much you need to save and how aggressive you’re willing to be, there are several things you can do to shorten the path to your dream home.

Easy, everyday money-saving strategies

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  • Create a household budget. There’s a budget worksheet in our free First-time Homebuyer Guide, if you need it. Knowing what you spend each month and how you spend it could help you find ways to save.
  • Define your savings goal. Not sure how much you’ll need? Use a down payment calculator. Having a number in mind will help you stay on track and measure your progress as you save.
  • Look for cash leaks. If you’re paying for a newspaper you never read, cable you don’t have time to watch, or a gym membership you wish you were using (but aren’t), now is the time to stop.
  • Commit to small sacrifices. Luxuries like your morning Starbucks, weekly movie night or monthly manicure can quickly add up. Check out for some more ideas on what to cut.
  • Put major spending on hold. Wouldn’t it be more satisfying to wait and park that nice NEW car in your beautiful NEW garage?
  • Use cash instead of cards when you can. If it helps, try this note trick to help you cut back unnecessary credit card purchases. BONUS: Keeping credit balances low can help you get ready to apply for a loan.
  • Open a separate savings account for your down payment and consider those funds off limits until you’re ready to buy. Don’t mingle this money with your regular or emergency savings.
  • Decide how much you can afford to set aside each month, then set up automatic deposits to your down-payment savings account. If you don’t have to think about it, you won’t forget to make the deposit or find another use for the money.

More aggressive savings strategies

  • Talk to a financial advisor to see if low-risk investments are an appropriate way to help you build your savings. Be sure he or she understands your buying timeframe and financial situation.
  • Weigh the pros and cons of temporarily diverting other types of monthly savings into your down payment fund, and ask your financial advisor or accountant whether that’s a good option for you. NOTE: Don’t forget to factor in employer-matching on your retirement or HSA contributions!
  • Larger sacrifices—such as turning your family vacation into a staycation or trading your high-payment car in for a more affordable model—may help get you into your new home faster.

No matter what saving strategies you try, always be sure to track and celebrate your progress. Think about how proud you will be when you’re finally holding the keys to your brand new home.

Have questions about down payments or other parts of the mortgage process? Contact a loan officer at our affiliate mortgage company, HomeAmerican Mortgage Corporation, at 866-400-7126.