How To Save for a Down Payment on a Home While Renting

by THE CUOMO TEAM REALTY GROUP Kimberly Cuomo 10/07/2018

It can be difficult to find the extra savings to put towards your first home as a renter. With rent and utility prices rising, most people’s paychecks are leaving them with less and less savings at the end of the month.

Buying your first home, however, can be a great long-term financial decision. It will help you build equity, and, eventually, you’ll be able to use that equity toward another home or toward retiring.

In today’s post, we’ll talk about some of the ways to save for a down payment while renting an apartment.

How much to save

In order to make the most of your first home purchase, you’ll want to save up as much of a down payment as possible. This will help you receive the lowest interest rate and reduce the amount you’ll pay toward interest.

If you can manage to save 20% of the loan, you’ll also be able to waive private mortgage insurance (PMI), that would otherwise set you back around $100 per month or more.

Smart ways to save while renting

If you’re ready to get serious about saving for your first down payment, let’s talk about the best way to approach your savings plan.

Pay off small debts

If you’ve had that lingering credit card debt that you’ve never quite paid off, now is the time. Take a look at your current debts. Pay off the smaller balances first and focus on debt with the highest interest rate.

This will enable you to start making larger deposits toward your down payment savings sooner and can help you avoid needlessly paying interest on small loans and credit card debt.

Open a dedicated account or CD

The best way to make sure you contribute to your down payment savings plan is to open a savings account or take out a CD (certificate of deposit).

A savings account with a high-interest return is a good option for people who are worried that they may need to access their funds before they’re ready to buy a home.

If you’re comfortable with not being able to access your funds until a set date, then a CD could help you save more money.

Since CDs are a one-time payment, many people choose to combine both CDs and high-interest savings accounts to achieve their savings goals.

Regardless of which option you choose, be sure to shop around for the highest interest rate. Online banks tend to have higher rates than traditional banks and are also easy to sign up for.

Direct deposit a portion of your pay

Opening a bank account or CD won’t do you any good if you don’t commit to contributing to it. If you are paid via direct deposit, visit your HR office and ask them to reassign a portion of your weekly pay to your new account.

By following these tips, you’ll be able to better prepare for your down payment. Don’t  wait! The sooner you start saving, the sooner you’ll be able to purchase your first home.

About the Author
Author

THE CUOMO TEAM REALTY GROUP Kimberly Cuomo

The Cuomo Team Realty Group - 24 years experience serving South Florida's Real Estate needs!

Specializing in Residential and Commercial Real Estate Services - 

I am a dedicated Realtor specializing in Palm Beach, Martin, and St. Lucie Counties. The commercial division of our team covers Central Florida, and all of South Florida including Broward and Dade Counties. 

I pride myself on being honest and professional. I have been committed for the past 24 years to have all of my clients 100% satisfied with my services, at all times- from the first time home buyer, luxury client, to commercial property investor- and everything in between! In this ever-changing marketplace, it is imperative to have an experienced Realtor. It can make all the difference in the world in your transaction! I have been successful in accomplishing this based on a long list of satisfied clients! I would be honored to help you buy or sell your next property! 

I have lived in the local area for over thirty years. After college, I worked as a paralegal for five years before deciding to go into the real estate profession in 1998. My husband, John, and I have resided in the Town of Jupiter for the past thirty years and consider it a great place to live, and have raised a family. We have two sons, 21 and 24.

One of my sons, Matthew Cuomo also works on our team, along with my daughter in law, Tasianna Cuomo. John, a retired firefighter from the Town of Palm Beach, works in the Commercial Division. My sister in law, Christine Cuomo Georgeou, also is part of our team, so that someone is always available to service any client, any time, 7 days a week! 

You can contact me directly anytime at 561-339-3002, and I will be happy to assist you with any of your real estate needs! I look forward to hearing from you!

Kim Cuomo

Keller Williams Realty

KW Commercial