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For most people, owning a home is an essential part of the American dream. As you look at homes for sale, the asking prices may seem daunting initially, but there are steps you can take right away to start setting aside money for a down payment. Below are a few tips to help you with this process.

How to Save Money for Your First House

1. Break Down Totals Into Digestible Numbers

Depending on the type of mortgage, the typical down payment on a home ranges between 10% and 20% of the total selling price. However, even saving this percentage can feel like a tough goal to achieve, so break it down even further.

First, peruse current homes for a sale to get an idea of your budget and what's in your price range. Then, set a deadline and divide the approximate down payment total for a home in your price range by the number of months before the deadline.

For instance, you want to have a 20% down payment saved for a $150,000 home within 36 months. You would need $30,000, which comes to approximately $833 per month. $833 is a much more digestible number than $30,000.

2. Establish a Down Payment Fund

homes for saleGo through your daily, weekly, and monthly expenses to see where you can make cuts. Transfer all the money you save, as well as any unexpected windfalls like work bonuses or gifts, into a separate savings account that only holds money reserved for the down payment. Plenty of small changes can add up to significant savings, such as taking your lunch to work, downsizing cable services, and picking up overtime or a weekend job.

3. Explore Programs for First-Time Homebuyers

Many states have programs designed to assist first-time homebuyers. For example, the Iowa First Home campaign allows individuals or couples to save money in a 10-year, tax-deductible account to go toward a first-home purchase. Any legal adult qualifies for this program so long as they haven't owned a home in the previous three years.

 

When you're looking for area homes for sale, Blum & Leonard Insurance and Real Estate is here to help. They have more than three decades of experience serving Emmet County, IA. They are a full-service real estate agency offering homes for sale, as well as an insurance provider with auto, health, homeowner, and other coverage options. Call (712) 362-7272 or visit them online to learn more about their current listings.

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