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Saving For a Down Payment on Your New Home

As interest rates remain low, many prospective home buyers in the Washington DC area are considering taking the leap. One challenge, especially for first-time buyers, is accumulating the necessary cash for a down payment. With the higher price points for homes and condos in the greater DC area, even minimum down payments for FHA or other low-down payment programs can prove to be a hurdle that seems insurmountable.

It CAN be done. It requires some creative problem-solving and a willingness to tighten the belt on spending, but you CAN squirrel away the funds for a down payment on your home. Note: Check with a mortgage expert for VA zero-down programs, if you qualify, or for other local and community-based programs that help first-time or lower-income buyers with down payment assistance.

Here are some ideas on how you can save for your down payment.

Get a Side Hustle

Working a 2nd (or 3rd!) job may not seem super desirable, but you need to bring in more than you spend in order to add to your savings. If you have already eliminated unnecessary spending, but find you aren’t making enough progress in saving money, then you may need to think about finding creative ways to earn more money. Think outside the box of traditional part-time jobs, like retail or fast-food – these jobs don’t make much, anyway.

Do you have a nice car? Programs such as Uber or Lyft can allow you to make some side money, while being in total control of your schedule. There are also deliver services, such as Uber Eats.

Do you like animals? Rover.com will allow you make extra money as a dog walker or pet sitter, by offering your services via their online platform.

What are your talents, interests, or likes? More than likely, you can parlay that into some kind of money-making opportunity while also working your full-time job.

NOTE: Check with your mortgage rep on any rules for proving the source of your down payment funds.

Sell Things You No Longer Need

Reducing clutter in your life can have a lot of advantage. But one advantage is that there is almost always someone who needs what you no longer need or want. Using Facebook Marketplace, EBay, Craigslist (be careful and follow personal safety guidelines), various selling apps, or just a good old garage sale, can be a great way to unload clothes, tools, furniture, or other items you don’t need, then put the money you make in your down payment fund.

Look for Ways to Save on Every Day Expenses

Shop around. Can you get your care insurance, renters insurance, or life insurance more cheaply? Check with your agent for any discounts you may be missing, or shop around for better rates. Then commit to putting the savings in your down payment fund.

Are you  buying a daily gourmet coffee? Invest in a coffee maker at home, and commit to putting the daily savings into your down payment fund. Same with eating out. Take a cooking class or collect recipes online, and start cooking at home, rather than eating out. You’d be surprised how much money you save each month. Put that money in your down payment fund.

Save energy by using fans instead of A/C, closing off unused rooms, unplugging unused appliances and electronics, switch to LED bulbs, use water saving shower heads, etc. As your utility bills decrease, put the difference in your down payment fund. You can also cut the cord on cable and use a streaming services for your entertainment, instead.

Check With Your Bank

You’d be surprised how many people think they canceled that membership or subscription, only to find out months later that their accounts are still being charged. Go through your bank statements with a fine-toothed comb, to make sure you haven’t missed anything.

Also, many banks are now offering “saver” programs of various types. One type of saver program involves regularly transferring money from checking to savings, in amounts set by you. Others offer virtual “envelope”-style budgeting tools and savings. Other programs round up your purchases with your ATM card to the nearest dollar, and puts the difference in a designated savings account.

These may be small steps, but every little bit helps, and it accumulates quickly, especially when you use multiple approaches to saving. You’ll get there! When it is time to sell or buy a home, having a local team you can rely on will make the process a smooth one. Call the Realtors® who love where they live and understand the local real estate market. ADMC Realty Group happily serves the communities in and around the Washington DC, Maryland, and Northern Virginia areas. From start to finish, we’re here to help with all your Real estate needs. Give us a call at (202)596-8101 or email us at [email protected].

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