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Buying your first home is an exciting milestone, but it can feel overwhelming—especially when it comes to saving for a down payment. Whether you're just starting your savings journey or you're getting close to reaching your goal, planning ahead can make a huge difference in how quickly you get there.

In this blog, we'll break down practical steps to help you save for a down payment, so you can be on your way to owning your dream home.

1. Set a Target Amount

Before you start saving, it's important to know how much you’ll need. Typically, a down payment is between 3% to 20% of the home’s purchase price. For example, if you’re looking at a $250,000 home, a 10% down payment would be $25,000. If you can put down 20%, you'll avoid private mortgage insurance (PMI), which can save you money over the life of your loan.

Once you have a target, you can break it down into smaller monthly savings goals that feel more manageable.

2. Create a Dedicated Savings Plan

To reach your down payment goal faster, it's helpful to open a separate savings account specifically for your house fund. This way, you’re less likely to dip into it for other expenses.

Automating deposits into this account can help keep you on track. Even a small amount consistently saved each month can grow over time. You can also set up your account at Valley Credit Union, where we offer competitive savings options to help your money grow while you work toward your homeownership goal.

3. Reduce Unnecessary Expenses

Take a close look at your current budget and see where you can cut back. You don’t need to eliminate all the fun, but small adjustments can add up over time. Think about reducing dining out, cutting subscription services you rarely use, or choosing a more budget-friendly vacation this year. Every dollar saved brings you closer to your new home.

Another helpful tip: Funnel any unexpected windfalls, like tax refunds, bonuses, or gifts, directly into your down payment fund. This can make a significant impact without requiring major changes to your regular spending habits.

4. Increase Your Income

If your budget is already tight, consider ways to boost your income. Picking up a side hustle, selling items you no longer need, or taking on freelance work can add extra money to your down payment savings. It doesn’t have to be a long-term commitment—just something to give your savings a boost in the short term.

Any extra income you earn can go directly into your home savings account, accelerating your progress toward your goal.

5. Explore First-Time Homebuyer Assistance Programs

There are many programs available to help first-time homebuyers with down payment assistance or special loan terms. 

At Valley Credit Union, we can help you explore the programs that may be available to you.

6. Keep Your Credit in Check

While you’re saving for a down payment, it’s also important to keep an eye on your credit score. A higher credit score can help you secure a better mortgage rate, which can save you money over time.

Make sure to pay down any high-interest debt, keep your credit card balances low, and make all payments on time. These actions will improve your creditworthiness by the time you're ready to apply for a mortgage.

7. Get Pre-Approved Before You Start House Hunting

Once you’ve saved enough for your down payment and feel ready to start the home-buying process, it’s important to get pre-approved for a mortgage. A pre-approval shows sellers that you’re serious about buying and gives you a clearer picture of what you can afford.

When the time comes and you're ready to get pre-approved, make sure to contact Valley Credit Union. We’ll help you through the pre-approval process and make sure you’re in the best position to secure the financing you need. With a pre-approval in hand, you can start your house hunt with confidence, knowing exactly what your budget is.

Final Thoughts

Saving for a down payment can feel like a daunting task, but with careful planning, a dedicated savings strategy, and the right support, you’ll be handing over those keys to your new home before you know it. Whether you're just starting or getting closer to your goal, Valley Credit Union is here to help every step of the way. From setting up a special savings account to getting pre-approved for a mortgage, we’re ready to guide you through the process of homeownership.