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Saving for Your First Home
Deciding that you want to become a homeowner is a big step that comes with lots of questions. One of the first you'll need to address is how to save for your down payment. Don't worry, you can do this! Our REALTORS® offer these tips to get you started saving today. 

Down Payment Basics to Get Started

Decide how much you need to save. A down payment is a substantial amount of money and it isn't going to magically appear in your budget. There's real effort involved here. You may have to cut your spending, earn extra money or both.

First get a starting point. Lenders want to keep your house payment around 25% -30% of your monthly income. Take your monthly income and calculate 25% - 30% of it. This is your future house payment.

Input your desired monthly payment into an online tool (like this one from to calculate how much house you can afford. Take 20% of this number. That will be how much you need for a down payment. You may be able to buy with less, but if that happens the extra can go toward closing costs or moving expenses.

Decide how quickly you'll need to save it. Work backward from there. For example, if you need a $40,000 down payment and want to buy a home in 3 years, you'll need to save a little over $13,000 per year or $1,084 per month.

Your Savings Plans

  1. Utilize automatic savings. Set up a separate savings account specifically for your down payment and have a portion of your paycheck directly deposited into it. If getting your direct deposit split up isn't possible, set up automatic transfers from your primary account. When the money automatically goes in, you don't have a chance to spend it on other things.

  2. Save unexpected cash. Your tax refund, that year-end bonus, the birthday gift from Grandma. You get the picture. You weren't planning on having it anyway, so you won't miss it.

  3. Pay off your credit cards and save the extra cash. Start with the highest rate card and work your way down. You were already paying out that money anyway, pay it to a different purpose.

  4. Cut your current housing costs. Get a cheaper apartment, get a roommate, or move in with a relative that will charge you little or no rent. Then put the extra money into your savings account.

  5. Downgrade your current vehicle. If you're in an area where biking and/or public transportation is a reasonable choice and you're willing to sacrifice for the near future, selling your car can net you a significant amount of money. If your car is newer, sell it and switch to an older one. Just make sure what you're replacing it with is in good shape and reliable. If you're a two-car family, switch to just one or downgrade one of the vehicles.

  6. Get a side hustle. Use your skills to earn some extra money. Walk dogs, drive others around, deliver groceries, freelance, or babysit for your friends. You're only limited by your creativity.

Additional Advice

  • Start tracking spending and make a monthly budget, so you know where to cut expenses.
  • Have an emergency fund before saving for a down payment. Emergencies happen, no matter what you'd rather do with your money.  When they do, you'll still have your down payment.
  • Look into down payment assistance programs for first-time buyers.

Margaret Rudd & Associates - Your Brunswick County Real Estate Experts

You'll find a team of dedicated REALTORS® at Margaret Rudd & Associates who are driven to make buying your first home a great experience. Contact us with questions about buying a house or to get your home search started.