Tricks For Keeping A Down Payment For A Home When You Love To Shop

Posted on: 25 June 2016

If you have gone through credit counseling or financial guidance and you have determined that you are ready to purchase a home, the first step that you will need to take is to save a down payment. Depending on the size of your down payment, this amount of money may actually help you afford a house that would otherwise be outside of your range. Most traditional loans will require around 10% down on a home loan. Some programs will require as little as 3%. If you are ready to purchase the home of your dreams but you tend to be a shopaholic, here are some tricks on keeping your down payment in your pocket and out of cash registers. 

Look for down payment assistance programs

There are programs that will provide down payment money for specific sets of buyers. This includes first time home buyers, home buyers with low income, purchasers of foreclosed homes and more. Think of these as scholarships, or free money, for the purchase of your home. Spend at least one to two hours on one of your free days researching and applying for these assistance and grant programs. You may find that applying to one or two programs per month will pay off in the tens of thousands. The best point about this option is that the money is held for you and cannot be spent until you are signing for your home. 

Keep the money in CD's or a specific home account

There are banks that have accounts specifically for down payments for home. These accounts only allow you to withdraw for the purchase of a home without a penalty. Another easy-to-find product are certificates of deposit, or CD's from banks. These will hold money in an interest bearing account that matures at a set schedule. Put your down payment cash into a CD and allow the bank to hold it for this amount of time in order to collect as much interest as possible at the end. 

Create a capsule wardrobe

No matter how much you love fashion and clothing, there are sure to be some pieces in your wardrobe that you no longer wear. Go through your drawers and closets and find pieces that you no longer need and can sell or take to a consignment shop. Contribute this money to your interest bearing account. If possible, cut your wardrobe down to the high quality, designer pieces that you love and will wear all the time. This should keep your fashion loving side happy, while quelling your need to own many clothing items. 

For more help, contact a center like the Financial Guidance Center.