Mortgage Down Payment

For most people looking at buying their first home, saving their money for the down payment is often a difficult challenge. Coming up with 5%-20% of the home's value can be a stretch and some people have to save their money for years in advance just to come up with it. It doesn't have to take you long though, considering many lenders no longer require large down payments and some may even allow you to put zero down. However, keep in mind that it's almost always better to have a larger down payment on your home. The bigger the down payment, the less you'll have to pay later with added interest and the more likely you can avoid paying for the dreaded mortgage insurance. By saving for a large down payment, you may also be able to get a more expensive home or overcome a poor credit history. If you're really having trouble coming up with your down payment, ask lenders in your area about first time buyer programs that can help you get the home you want.

Saving for Your Down Payment

If you want to put a significant down payment toward your mortgage, here are some tips to start saving for it:

• The first thing you should do is outline a plan for how large of a mortgage you want and how much of a down payment it will require. Now you can start to financially map out what it will take to get there.

• Start your saving immediately! Yes, that does mean making some sacrifices, such as waiting on that new high-definition TV or putting off your vacation this summer.

• Be careful not to over extend yourself. One of the problems that some new home buyers run in to while saving for their mortgage is actually accumulating credit card debt. Saving for your down payment is important but be realistic in your approach.

• Find something you can cut out of your budget each month. There's a lot of things we waste our money on, for instance, can you live without those premium cable channels until you get your home? How about reducing your cell phone plan or cancelling magazine subscriptions?

• Finally, make sure your down payment is ready to go at least sixty days before your apply for your mortgage.