Mortgage California Blog

Easy Ways to Start Saving for a Down Payment

July 9th, 2015

MortgageAre you feeling intimidated by how much money you think you need to save up for a down payment on a house? First, talk with a reputable mortgage loan officer to find out how much you could afford, and identify if there are any low down payment mortgages you could qualify for.

Then make sure you ask about additional closing costs, fees, and insurance. You will get estimates, and you can plan on saving up a little bit more. Anything extra can be used towards a great dinner out to celebrate or some new furniture in your home. But for now, you have a goal to shoot for.

Saving up doesn’t have to be a hardship.

You need to have

  1. Good credit
  2. Reliable income

And you should have

  1. Emergency savings fun
  2. Know how to budget
  3. Debts under control

Verify You’re Not Overspending

Review your current insurance and see if you could get by with a larger deductible and lower payment.  Another place people often overspend is their phone service. Look carefully at your bill and see if there may be something tagged on that you don’t really need or use. Also, you can review how much data you really need for your smart phone. And do you really need the full everything package for your tv service? Shop around and see if you can get better deals on everything.

Learn How to Cook

You may need to spend some money to save money here. If you really don’t know how to cook, look into inexpensive classes through your community center. You could also take classes through stores such as Sur La Table. Get a simple cookbook and practice. You can also check out cookbooks from your local library. You will need some basic supplies such as a good knife, a frying pan, and a pot with a lid. The more you can eat at home, the more money you will be able to save. Plus, when you do eat out, it will feel like a very special treat.

Learn How to Budget

Nothing strikes fear more then the word “budget” (except maybe for “diet”).

Both are really just a way of tracking what you’re spending. A budget is useful for identifying areas where you may not realize you’re overspending. And it can be a good tool for finding out areas where you may want to choose to spend less (dining out, morning coffee, happy hour with coworkers, etc.)

Online tools such as, and can help you manage your spending to save more on everyday expenses.

Don’t try to cut everything to the bone. Find compromises such as getting coffee one day a week, or cutting back on your cable but signing up for a streaming service like Netflix. It will take longer but it will be easier.

And consider saving less for retirement right now.

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You may want to consider finding a cheaper place to rent while you’re saving up for the down payment.

You may want to consider taking a part time job on the side and put all of that money into your house fund.

Find free activities like hiking.

First-time homebuyers can cash out up to $10,000 from an IRA without having to pay the standard 10 percent early withdrawal fee. If you’ve been saving in an IRA, check your balance, and consider cashing out part of the money to put toward your down payment.

Find low cost activities such as renting a movie from Redbox instead of seeing it in the theater.

Sell extra stuff on Craigslist or eBay and put that money into your house fund.

Evaluate your cars. If you’ve paid it off, look into holding onto it. If it’s a really expensive car to maintain, consider selling it, paying off what you still owe and look into an inexpensive car. You want to find one that is low cost to maintain as well as to service.

Put aside any chunks of money you get such as gifts, tax refunds, and bonuses. Even consider putting aside the extra money if you get a raise.

And the most important thing of all is to keep track of how well you’re saving while at the same time pretending that it doesn’t exist so you’re not tempted to dip into it. Consider having two savings accounts. One for your emergency fund, and the other for your home fund.

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