15 Realistic Ways to Save for a Down Payment

Buying a home generally requires bringing a down payment to the table at closing. And in today's market, coming up with those funds is no easy feat, given how high homes prices have climbed. If you're hoping to buy a home in the near term, here are some tips for scrounging up a down payment.

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It's hard to save for a down payment without knowing what sum to target. Take a little time to research homes in the neighborhoods you're interested in moving to. That will give you a sense of what home price -- and down payment -- you're looking at.

ALSO READ: How Much Money Do You Need to Put Down to Buy a Median-Priced Home?

Following a budget could help you curb your spending and free up more cash for a down payment. List your expenses on paper or a spreadsheet and see where there's room to cut back. You can also use a budgeting app to simplify the process.

Slashing one major expense in your budget could get you closer to your down payment. That could mean moving into a smaller rental until you're ready to buy or getting rid of a car if you can manage without it.

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Cutting back on smaller expenses will also get you closer to that down payment. Consider ordering fewer takeout meals, brewing your own coffee a few mornings a week rather than buying it, and replacing a more expensive cable plan with a basic package or a streaming service.

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If you got a raise to kick off 2022, you might not be used to spending that extra money just yet. Allocate all of it to your down payment, and you'll position yourself to buy a home much sooner.

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If you're expecting a tax refund this year, you may have big plans for that money, like using it to take a vacation. But if you're serious about buying a home, adding it to your down payment pool is a better bet.

ALSO READ: Tax Season Is Open. Here's How to Get a Faster Refund.

The beauty of getting a side hustle is that the money it pays you is extra. As such, you should be able to save all of it for homebuying purposes, minus what you owe the IRS for taxes. There are numerous gigs to choose from these days, so think about what works best for your schedule and what sort of job will get you closest to your savings goal.

You probably have items you can do without taking up space in your home. Selling them could give you more cash to buy a home. You can even round up friends in a similar boat and advertise one giant yard sale.

ALSO READ: What Is a Down Payment Gift? What You Need to Know

As much as you might be itching to get away on vacation, if you're serious about buying a home, skipping this year's trip could make sense. You can take the money you would've spent on a hotel and airfare and add it to your down payment pile instead.

If you owe money on credit cards, consolidating that debt could make it less expensive to pay off, thereby freeing up more down payment funds. You can consolidate your debt via a balance transfer or by taking out a personal loan.

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Having the occasional no-spend week or weekend could result in a world of savings. And if you really want to buy a home sooner rather than later, you might do a no-spend month, where you limit yourself to only essentials during that time.

ALSO READ: 3 Signs You're Spending Too Much -- and How to Stop

Climbing the ladder at work might require more time and effort on your part -- but it could come with a lot more money. That could, in turn, get you to your down payment goal sooner.

The simple act of automating your savings could make it easier to stick to your goals. Arrange for a portion of each paycheck to be moved from your checking to your savings account automatically so that you stay on target.

ALSO READ: Best Online and High-Yield Savings Accounts of February 2022

It generally costs less money to purchase a starter home than a larger, more updated space. If you're willing to live in a starter home for a few years, you might manage to accumulate your down payment sooner since you'll generally need less money up front.

ALSO READ: Does Refinancing a Starter Home Make Sense?

Many states have programs in place to help lower-income buyers or first-time buyers afford a home. Check your state housing finance agency's website for more information on down payment assistance programs in your area.

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While certain mortgages let you buy a home with no money down, generally speaking, you'll need to put some funds down at closing to purchase a home of your own. Stick to these tips, and you may end up in a position to fill out those loan applications sooner than expected.

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