Tips to save for a new home

  1. Determine how much you need

    You need a 30% down payment to buy a house, right? Not necessarily — many banks now offer conventional mortgage loans with down payments as low as 3%. There are also government-backed mortgages like FHA loans, which allow down payments starting at 3.5%, and VA loans and USDA loans, which may require no down payment at all. Depending on the loan, you may have to pay for mortgage insurance, but you may decide this is a worthwhile trade-off if it gets you into a home sooner. Meet with a mortgage loan officer to determine what types of loans you could qualify for, how much house you can afford and how much of a down payment you’d need. That will inform how much you need to save, and who knows — it may be a lot less than you think! {Learn more: How much house can I afford?}

  2. Get your debt under control

    Carrying a lot of debt makes it more difficult to save for a house, since a chunk of your income goes toward repayments. That debt load can also make it more difficult to qualify for a mortgage. If you have debt, do whatever you can to reduce it. If you have student loans with high interest rates, consider refinancing them to lower your payments. If you have high-interest credit card debt, pay off as much as you can and consider transferring your balance to a low-interest card.

  3. Put retirement savings on temporary hold

    Caveat: This might not be advisable if you’re close to retirement. But if you’re young and actively contribute a percentage of your income to a retirement plan, consider temporarily diverting that money to down payment savings. This should only be short term, but it can make a big difference in how quickly you can save for a house, especially if you currently put a sizeable chunk of every paycheck into a retirement account.

  4. Use technology to make saving less painful

    Cutting back and setting aside money is obviously important if you want to save up for a house, but taking a portion out of each paycheck can feel like it’s cramping your style. Save a daily amount small enough that you won’t notice it or hurt your budget. Your spare change can add up quickly over time, and you can also make one-off deposits whenever you’re able to.

  5. Ask for gift money

    When your family asks what you want for your birthday, Christmas, anniversary or any other special occasion, tell them you’d love to forgo tangible items and instead receive gift money that you can put toward a house down payment. While not everyone may oblige, some of your relatives may enjoy knowing they’re helping you attain your dream of homeownership.

  6. Get a side hustle

    With the gig economy continuing to expand, there are ways to make a quick buck to help boost your down payment savings. Consider spending a few hours a week driving for a rideshare service, shopping or delivering meals for an online delivery service, walking dogs, pet sitting, charging self-service scooter. Thanks to technology, there is an ever-increasing number of freelance opportunities like these that require very few qualifications and make it easy to earn extra cash you can put away for a home.