The Lowdown on Home Down Payments
Tired of rent that keeps increasing and maintenance requests that keep getting ignored? Are you ready for a place of your own? If you’ve decided buying a house is in your near future, it’s time to start saving for a down payment.
What is a down payment?
A down payment is the amount of the home’s purchase price that you pay upfront in cash. For example, if you wanted to put 5% down on a house that cost $100,000, your down payment would be $5,000. You can work with a lender like Landmark to cover the balance of the purchase. You’ll repay the lender through your monthly mortgage payments.
How much do I need for a down payment?
In order to determine how much you’ll need to save for your down payment, you’ll first need to approximate your budget for a house. You can use our Mortgage Qualifier Calculator to figure out how much house you can afford by entering your income or your desired monthly payments. Once you have an estimate of your home buying budget, you can calculate what percentage you want to put down. Through Landmark’s First-Time Home Buyer Program, you can put as little as 3% down. Try our Down Payment Savings Calculator to break down your savings goals based on what you’ve already put away and how much longer you plan to save.
How can I save for a down payment?
Saving several thousands of dollars can sound daunting at first, but putting aside as much as you can each month will add up over time. Here are a few ideas to help you meet your savings goal:
- automatic transfers. Consider setting up bi-weekly transfers from your checking to your savings each paycheck. That way you won’t be tempted to spend it, and you won’t even have to think about it!
- Cut back on non-essential spending until you meet your goal. Perhaps drop a streaming service, eat more meals at home, brew your own coffee and skip buying those new pair of shoes if you don’t need them. Put the extra money you didn’t spend into savings.
- Come into a little money you don’t usually receive? You can put your tax refund, work bonus or cash gifts from your wedding toward your down payment.
- Pick up a side gig to bring in some extra money such as selling crafts, tutoring, pet sitting, providing childcare or flipping furniture.
Buying your first home is a big deal! It’s exciting but can also feel overwhelming. We’re here to help you every step of the way on your path to homeownership.