How to save for a mortgage down payment
So you’ve decided you’re ready to trade in renting for the joys of homeownership. Fantastic. We’re on board. Now it’s time to start saving for your down payment.
Saving for a down payment can seem challenging — that’s why we’re here to help. Sure, you might have to be a bit disciplined with your money for a bit, but whenever you start to feel the squeeze, just imagine yourself sipping tea on your very own porch, making dream remodels happen, sleeping through the night without music thumping from the apartment above you — whatever vision motivates you to stick it out.
The sooner you get started, the sooner you’ll be ready to pounce on that perfect-for-you home.
Here are 10 simple things you can do to accelerate your savings:
1. Open a savings account with a home as the goal
If you’re ready to own a home, that means you probably already have an emergency fund stashed away. Keep your down payment separate from the rest of your savings by depositing it into a separate account, like OCCU’s Ignite Savings. That way, you can track your progress at a glance — and you’ll be less tempted to dip into your emergency fund to hit your target.
2. Automate your savings
Saving is easiest when you don’t have to think about it. Once you determine how much you can afford to save each month, set up an automatic savings transfer to move the funds into your savings account as soon as you get paid.
3. Consider a side hustle
In today’s gig economy, there are all sorts of ways to make a little extra money on the side. Think about how you can leverage your skills or hobbies into a money-making venture. For example — pet sitting, dog walking, opening an Etsy shop, virtual tutoring and making deliveries are all viable side gigs that can help boost your savings.
4. Earn interest on your checking account
The more your savings account grows, the more interest you’ll earn. Did you know you could also be earning interest on your checking balance? Upgrade to OCCU’s Remarkable Checking® and transfer the interest you earn into your savings.
5. Revisit online subscriptions
The cost of streaming services and other app subscriptions may not seem like much, but you might be surprised at how quickly they add up. Chances are, you’ll find at least one or two you can live without. Cancel them and add the amount to your monthly savings transfer.
6. Save your spare “change”
Remember all the change you used to accumulate when you paid for things with cash? You can do the same thing with your debit card. Our Change Jar program rounds up every debit purchase to the nearest dollar and deposits the extra into your savings account.
7. Plan a staycation
Lately we’ve all learned unique ways to make staying at home fun and unique. Our time spent at home could help boost your down payment savings. Plan some fun activities around town, put up a “do not disturb” sign and throw in a little pampering. Don’t forget to spend some time daydreaming about what your new home could be.
8. Grow your savings with compound interest
Saving for a down payment takes time. You can use that time to your advantage by leveraging compound interest. Once you’ve got at least $500 saved up, deposit it into a CD account and earn extra interest on it. The longer the term, the more interest you’ll accumulate.
9. Sell your extra stuff
Moving is easier when you have less stuff. Go through all the things that have been collecting dust and sell them online or have a virtual garage sale.
10. Save your pay raise
Put your annual raise, bonus or any other boost to your paycheck directly into savings. You’ve budgeted without it this long — you can go a little longer.
Now that we’ve got you thinking about ways to save, gather up the family and do a little brainstorming. We bet you’ll come up with some great ideas of your own. Be creative and committed, and you’ll have your down payment before you know it.
Ready for your dream home? It’s closer than you think. Our team of mortgage loan officers is ready to connect and help create a plan to move you into the home of your dreams.
