How to Afford a Down Payment

Saving for the down payment of your house is an expensive commitment. Sometimes you are required to have as much as 20% down in order to get the loan. If you want to buy a home that costs $200,000 then you would need $40,000 to purchase it. Here are some helpful tips on how to come up with the cash.

1. Reduce your living expenses: eat out less and eat at home more often. Try to rent movies instead of going to the theatre, but if you must gosee a brand new film avoid the snacks because that's where they empty your wallet. Make your own coffee instead of going to Starbucks. If you spent $5 less a week, then you would have an extra $260 a year! In four years that's more than $1,000! If you can get around without a car do it. You wont have to pay for gas and insurance, and you'll gain cash with the sale.

2. Bank it: Try putting your savings into a different account that you'll only touch for the down payment. Figure up a percent of you paycheck to add to that account.

3. Look for Federal/State Assistance: There are federal and state assistance programs to help with the first purchase of your home. Go to the U.S. Department of Housing and Urban Development for more information. HUD can also pair you up with a counselor who can give you advice on how to handle your debt and save for the down payment.

4. Put Away the Credit Card: Do your best to pay cash for your purcahses. If you don't have the card with you when you shop, then you won't buy items you can't afford and ones that you don't need in the first place.

5. Move in with Mom & Dad: Quit paying rent and move in with a relative or a friend. You'll save a great chunk of change without paying rent to a landlord.

6. Clip Coupons: You will only save less than a dollar on each purchase, but those pennies will add up.

7. Look for Extra Cash: If it is possible take on an extra job to build up your savings for that down payment. You can also try selling your possessions online or through a garage sale.

8. Get help from Family & Friends: The government allows you to receive up to $13,000 (as of Jan. 2009) from a single donations each year that are tax free. So if your family and friends are willing to help you out, this is free money. 

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