Eight ways to save for a down payment

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Posted: May 15, 2019 - Homebuyer's Blog

When buying a first home, many people save for their down payment for several years. The higher your down payment is, the lower your loan and monthly payment will be.

Hartz Homes wants to share eight things other people have done to make sure there’s enough money when it’s time to get a first mortgage.

  1. Transfer a fixed amount into a special savings account every month.

This is the most popular—and convenient—way to save. Set up an automatic direct deposit into a savings account. Commit to never use these savings for any purpose other than your down payment.

  1. Skip vacations for a year.

If you save the money you would have spent vacationing, you can make significant contributions toward a down payment.

  1. Lower your expenses.

Review your expenses and look for what you can reduce or eliminate. Put the money you would have spent on these items into your down payment savings account.

  1. Reduce your high interest rate debt.

High interest rates on credit cards can seriously limit your ability to save. Pay off your high interest rate credit cards. Start with your highest interest rate card; when you’ve paid the entire balance, close the card, and proceed to pay off the next. At a minimum, transfer your credit card balances to the card with the lowest interest rate.

  1. Borrow from your retirement plan.

Look for penalty-free withdrawals for home buyers in your plan. Many company-sponsored 401(k) or profit-sharing plans allow employees to borrow against their savings to purchase a home. Your Human Resources or Payroll department can help.

  1. Sell some of your investments.

Think of this simply as a way to move some of your current investments into another investment vehicle – your home! As you make payments on your mortgage, you accrue equity in your home. As the value of the home increases, so does the return on your investment.

  1. Get a second job.

Even temporarily, earnings from a second job can help you make substantial contributions to your down payment savings.

  1. Look into down payment assistance.

Some organizations might help you with your down payment. See if you qualify with the Federal Housing Administration, the US Department of Agriculture Rural Housing Service and the Veterans Administration. Also check out local housing authorities to see if they have programs to help.

Please check out these new home communities from Hartz Homes:

Armitage Pointe of Addison, Illinois (Chicago area new home construction)
Bella Vista Townhomes of Bolingbrook, Illinois (Chicago area new home construction)
Lago Vista of Lockport, Illinois (Chicago area new home construction)
Leigh Creek of New Lenox, Illinois (Chicago area new home construction)
Marquis Pointe of Montgomery, Illinois (Chicago area new home construction)
Marywood Meadows of Montgomery, Illinois (Chicago area new home construction)
Nantucket Lakes of New Lenox, Illinois (Chicago area new home construction)
Park West of Manteno, Illinois (Chicago area new home construction)
Playa Vista of Plainfield, Illinois (Chicago area new home construction)
Shannon Estates of New Lenox, Illinois (Chicago area new home construction)
Sky Harbor of New Lenox, Illinois (Chicago area new home construction)
Whisper Creek of Mokena, Illinois (Chicago area new home construction)

Hartz Homes has new home communities in:
Addison, Illinois (Chicago area new home construction)
Aurora, Illinois (Chicago area new home construction)
Bolingbrook, Illinois (Chicago area new home construction)
Lockport, Illinois (Chicago area new home construction)
New Lenox (Chicago area new home construction)
Manteno, Illinois (Chicago area new home construction)
Mokena, Illinois (Chicago area new home construction)
Montgomery, Illinois (Chicago area new home construction)
Plainfield, Illinois (Chicago area new home construction)