Mortgage loans typically require that you put between 3% and 20% down upfront. This payment is a significant amount of money, even if you’re buying a home on the more affordable end of the market with help from a real estate agent. One of the first steps for first-time homebuyers is saving for a down payment and closing costs. Here are some more pointers on how to pad your bank account when purchasing a new house.

How to Save Up When Buying a Home

1. Start With Debt

Loan officers look at your debt-to-income ratio, which affects the type of mortgage you qualify for. A lot of debt comes with interest and hurts credit. Before you start moving money into savings, work on paying off loans or outstanding credit card debt to boost your score.

2. Put Retirement Money Into the Fund

If you’re a young adult and not nearing retirement any time soon, this can be a quick and easy way to boost your down payment fund. Take the money you usually put into a retirement savings account—like a 401(k)—and put it instead toward the new house. This should only be a temporary measure if you’re planning to buy soon.

3. Analyze Your Budget

Many people don’t keep track of where their money goes, relying on autopay and direct deposit to do the legwork. For at least one month, however, track all of your spending.

Put each expenditure into categories: rent, transportation, food, utilities, medical, insurance, household, personal, debt, savings, and entertainment. Use subcategories to determine which expenses are necessary and which are luxury spending. Find where you can cut back, and put that money into savings instead.

Once you’re ready to look into buying a home, turn to Justyna Johnson – ExP Realty. This top local real estate agent is the trusted expert of Woodbury, MN, and the surrounding areas. She will provide priceless advice and guidance through the home search and purchase process. Contact her online or at (651) 501-2345 to get started. Plus, get a TRUSTimate—an accurate, free online property report—when you text “HOME” to the same number. You will receive no calls, spam, or sales communications—just the facts from your top local real estate agent.