Saving for a down payment seems to be the biggest obstacle for people who want to purchase a home. While there are mortgage programs available that require little to no money down, many of them require PMI (private mortgage insurance) each month. This will slightly increase your payments. One way to avoid this is to start saving a down payment for a house when you decide it is something that you will be doing in the near or distant future. It can be difficult to set aside money, especially when you are on a tight budget as most Americans are. But saving up a sizable down payment doesn’t have to a prevent you from achieving your dream of being a home owner. Here are four easy things you can do to help you save up a payment.
Set Up a Separate Account
If you are going to start saving up for a down payment on a house, you should have a separate bank account that is designated for nothing other than your down payment money. If you put your down payment money in your normal checking or savings account, it’s too easy and tempting to spend that money on bills and other things. It is also difficult to keep track of how much you have saved for your down payment. Make it a priority to set up a different account and never touch the money that is in there. You can jump start this account by depositing your income tax return, if you are receiving one. Just be sure to keep good record of your deposits as underwriting may require this information at some point. READ THE FULL POST HERE