Tips to Consider When Working Toward a Down Payment on a Home

Associated Press writer Alex Veiga reported yesterday that, “Saving up for a down payment is the biggest hurdle for many would-be homebuyers, particularly those looking to make the leap from renting to owning.

More than two-thirds of renters consider setting aside money for a down payment the No. 1 obstacle to buying a home, according to a recent survey by real estate data provider Zillow. That edged out other concerns, including job security and a thin supply of homes on the market.”

In his AP article, Mr. Veiga explained that, “Here are some tips to consider when working toward that down payment on a home:

* Start Soon– Begin saving now.  Renters may want to calculate what their extra monthly costs would be as a homeowner and then set aside that amount, minus rent and utilities. This accomplishes two goals: Saving money for a down payment and getting you accustomed to the financial constraints of living with the costs of homeownership.

* Weigh Loan Options–  Buyers may not need to save for a down payment at all if they are U.S. military veterans, servicemembers or residents of certain rural areas. The Department of Veterans Affairs and the U.S. Department of Agriculture have zero-down payment loan programs for qualified borrowers.

* Explore Other Options– Borrowers with low or moderate income, and teachers, firefighters or other public service job holders may also qualify for down payment assistance through thousands of federal, state or local programs aimed at helping homebuyers.

* Consider Using Home Equity– A newer approach to coming up with a down payment involves letting investors put up some of the money in exchange for a slice of the potential value in the home.

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