Buying your first home is a major milestone. But before you can start your search, you need to be financially prepared to cover the down payment. As you start to consider your residential real estate options, keep these valuable saving tips in mind.

How to Save for Your First Down Payment

1. Cut Frivolous Expenses

If you’re committed to purchasing residential real estate, now is the time to cut unnecessary costs. Common frivolous expenses include gym memberships, cable subscriptions, and dining out at restaurants. If you can trim a few of these from your life for several months, you’ll be surprised at how much your savings add up. Use that as your motivation to keep going.

2. Manage Your Debts

It can feel uncomfortable to commit to an enormous purchase when you’re still paying off bills. Debt can also make it tough to get approved for a mortgage and cast a shadow over the entire buying experience.

Pay off those debts first, so you can then save for your down payment. For example, prioritize the credit card with the highest interest rates.

You can also look into transferring the remaining balance to a card with a lower interest rate—just be sure to check the transfer fee first. It will be easier to save up when you have fewer payments to consider.

3. Know Your Responsibilities

If you can put at least 20% of a home’s selling price down, then you can avoid paying private mortgage insurance (PMI). Otherwise, you’ll have an added expense to pay every month on top of your house payment.

But it may take some time for you to save up to that point, so be mindful of what you might need to pay as you look at your real estate options.

If 20% isn’t possible, look for homes that won’t drive up your monthly costs more than you’re comfortable spending.

If you’re on the hunt for your first home, turn to the experienced team at Oahu Island Properties. Proudly serving homebuyers and sellers throughout the island, these real estate experts will assist you every step of the way! To find out more about getting started on your home search, call (808) 673-8681, or visit their website to check out their residential real estate options.