How To Save For A Home Down Payment

With social advancements, shelter has become one of the basic necessities of modern man. And buying a house is indeed the most remarkable event in one’s life. But this activity needs a lot of planning and monetary inflow. Both of these are complementary to each other. If the planning is proper and efficient then the inflow of money will be easy. Here are some points which one must consider while planning for a new house.

home downpayment

The first and foremost thing is the down payment. The buyer has to pay approximately 20% of the total price of the house as the down payment. This amount may drop to 3% of the total price in case of VA or FHA loans. But one has to have liquid cash in hands. Simple saving accounts may not seem helpful in this context. The person may go for certain other options like:

  • Having a quick review of investments in mutual funds or any other assets. It is advisable to sell off those assets which have gone through a cycle of poor performance.
  • Selling the properties which are no longer in use is beneficial in two ways. One, it compensates for the investment costs. Other, it saves the money spent on its maintenance annually.
  • The ornaments of different metals which are not in use for long can also generate the needed money.
  • In case of Retirement funds, a person is able to withdraw money under 401(k) and 403(b) plans of retirement. This can also be a great help.
  • IRA accounts also allow money withdrawal if the holder is buying a house for the first time.
  • Offering discounts on products which according to the buyer are no longer useful. This will help the buyer to get rid of unwanted products and will generate money as well.

Else, one can go for the programs offering comparatively lesser down payment for families having low annual income. These are organized by Federal Housing Administration or Veteran’s Administration and state housing authorities. All the ways suggested above may not be applicable in every case but will surely prove helpful to the one planning to buy a house in near future.

Image Credit:
Salvatore Vuono – Free Digital Photos.Net

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