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Saving up for your First Down Payment on a Home

washington dc mortgages first home down payment

Even if buying a house isn’t on your immediate radar, it’s likely that at some point you’re going to want to stop renting and plant your feet. When that time comes it’s ideal to have as much of a down payment as possible to broaden your horizons to what is available and save money by borrowing less from the bank. When you decide to pursue Washington DC mortgage lenders, be prepared ahead of time by taking measures to get your down payment as high as possible.

Figure out a number

You might not have a number down to the exact dollar since there’s no way to know for sure how the market for DC mortgages will be in the future. You still need to have an idea of how much you expect to spend for a home. You’ll want to save up at least 20 percent, plus any applicable fees incurred during closing. Consulting with a mortgage banker in DC can benefit you by giving estimates of how much you can afford and what kind of a down payment is necessary for homes that meet your criteria. Turn that into a realistic time frame so you know how much to put aside each month.

Smart savings

Keep money designated for your down payment in basic and stable savings accounts, instead of risky investments such as stocks. You want the money accessible when you consult with Washington DC mortgage lenders. You might gain money by investing, but you could also lose money and quickly derail your plans to purchase a home or consult with a mortgage banker in DC anytime soon.

Create an Automatic Savings Plan

Out of sight out of mind is a good mantra to observe while saving up money to enter the market of DC mortgages. Create an account specifically for the purchase and have the amount deducted as a set dollar amount or percentage automatically every week, pay period or month. An automatic deduction eliminates the urge to spend money that you should be saving since it never ends up in your pocket.

Build it up

Supplement the savings account by throwing any extra money you get right into that account to use for a down payment. Use birthday gifts, tax refunds, bonuses, or any other unexpected income to increase your down payment. You’ll get a lower monthly payment if you put more money down, or may find that you can afford something that was initially out of your price range due to saving up more money.

The amount you need for a down payment might seem daunting at first, but it doesn’t have to be. Put a realistic time frame on it and reduce spending to make your dream of being a homeowner a reality.

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