In 2021, the typical down payment for first-time homebuyers was 7%.* At LMCU, we’ve financed many homes for as little as 3% down. On a $250,000 home, 3% down is $7,500. It might seem like a lot, but if you start saving now, you can chip away at it little by little.
Once you’ve determined your down payment goal, it’s time to start saving using these strategies:
Maintain a goal-oriented sub-savings account or open a Money Market Account or Certificate of Deposit. Track your progress by assigning your dollars a purpose. One way to help you make the most of your dollars is to create a sub-savings account for the down payment on your home. You can easily create sub-savings accounts in LMCU’s online banking.
Consider using interest-earning, short-term accounts.
As your savings grow, consider transferring a portion of funds into an interest-earning, short-term account such as a Money Market Account or a Certificate of Deposit, where funds remain untouched for a specified amount of time. This can earn you higher interest than keeping all the money in your savings — just make sure the time frame matches up with your desired timeline for purchasing your dream home.
Find savings in your monthly budget.
Review your budget monthly for excess expenses. For instance, you could try cutting back on some of those “extra” expenses we all have, like a morning coffee run, Friday night takeout, or that extra streaming service subscription that you’re no longer using. A common strategy is to look at your budget and break it down using the 50-30-20 rule, which recommends that you spend 50% of income on needs (for example, food, housing, transportation, healthcare, clothing, childcare and education), 30% on wants, and 20% on savings or debts. Learn more budgeting tips and find our financial learning tools (blogs, podcasts, calculators and virtual education) at LMCU.org/FinancialWellness.
