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Five Tips to Help You Save For the Home of Your Dreams

For many, the thought of saving 20 percent – or even 5 percent – for a mortgage down payment seems like an unreachable goal. Through simple lifestyle changes and savings mechanisms, however, the dream of homeownership can become a reality.

First, investigate available assistance programs to see whether you qualify. The Federal Housing Administration (FHA) offers assistance programs in every state, mostly serving low- to moderate-income buyers. If you’re a military veteran, the Veterans Administration may also be your ticket to an assisted home loan.

Next, make your savings automatic. If you tend to be a spender, don’t give your down payment savings a chance to reach your checking account. Calculate the amount you’d like to save each month to reach your goal, then have that amount transferred directly into your savings account. You can even ask your employer to automatically deposit a portion of your paycheck into your savings.

If you need help finding that monthly targeted savings amount in your current budget, use these three methods s to pare down your monthly spending and find an influx of cash:

  • Kick that expensive coffee habit and brew your favorite blend at home instead.
  • Plan your meals ahead of time and buy only the groceries you need, and pack your lunch a few days each week rather than going out with coworkers.
  • Consolidate errands – or carpool with a friend – to save on fuel throughout the month.

Saving for a big-ticket purchase like your first home can difficult, especially if you’re on a budget. Taking advantage of assistance programs, automating your savings, and paring down unnecessary purchases are all incremental steps that can help you commit to the process and save for the home of your dreams.

Image via Flickr/GotCredit

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