How To Save Money for Buying a Home

Unfortunately the down payment remains among the greatest obstacles to buying a home, so start planning for it... Along with closing costs, moving expenses, insurance and incidentals. 

The larger down payment remains the industry-underwriting staple. Lenders prefer to loan money to borrowers who share as much of the risk as possible. A larger down payment generally means better interest rates and less (or zero) mortgage insurance. Mortgage insurance is money you'll never get back...

Here are a few ways to save more money, faster.

• Stop impulsive and compulsive spending habits. Skip the fancy drive-thru coffee and use a coffee maker at home. 
• Cancel subscriptions to magazines, the gym (get a friend and a video and do it at home), reduce your cable television channels and cut back on other services you can buy for less.
• Stream movies or grab a Red Box and microwave your popcorn at home or have a game night at home instead of going out every Friday night.
• Bag your lunch, go generic at the supermarket, reduce data gigabytes from 10 to 5 on your smart phone and wait until you have with-fi to Tweet and share.
• Plan to save. You won't know where you can cut costs if you don't know where your money goes. Make a budget to track your income and your expenditures.
• Auto-Save. Transfer that money directly from your paycheck into a savings or other interest bearing account using an automatic program at your bank or credit union.
• Bonus: The more you save, the more options you'll have to diversify savings into investments for a better return on your money.
• Dump credit accounts. Stop the "emergencies only credit card" nonsense. If you are saving money, there's your emergency fund. Any kind of credit allows you to spend more than you have and then pay through the nose for high credit card interest rates.
• Liquidate valuable hobby assets. What's more important? Buying a home or hockey gear? Something's got to give.
• De-clutter your garage, attic and closets. Gain a little cash plus when you move, you'll have less stuff to move and a smaller mortgage to boot.
• Get a(nother) job. A second job, maybe even a third. Finding additional sources of income can really help speed up that home buy.   Seasonal work, a home-based business, working half a night shift. If you're working you're not as likely to be spending. 
• Stop loaning money to the federal government. A tax rebate is nothing more than a loan to Uncle Sam, until tax return filing time, but you get zero interest. Adjust your W-4 to match your true tax liability and save the difference.

See Also: Home Buying Tips  |  Homes for Sale