It is never too early or too late to start thinking about saving up for a down payment. The more you have saved up for this component of the mortgage the less you will have to worry about in the long run; you will have less to pay off, and at a lower interest rate. Consider the information below when preparing yourself for making a down payment.

The first thing you need to do is to set up a budget; a down payment is a big undertaking which means cutting back on almost everything except for necessities. It is very common for people to state that they cannot economize further, but in reality there are many things that people spend money on and think it’s not a biggie, but these things do add up. Spending money for name-brand items, cable TV or subscription magazines are all things that you can live without. Moreover, to make some extra cash, take a look at all the stuff you have in your home, the things you never use but that are of value such as a coin, book, or stamp collection can be sold. If you are in need of more money, think about taking up another job, you have many options such as working retail during weekends, or working from home doing freelance work such as blogging.

The next step is to set up a savings account for your down payment. The best way to start adding money into this account is to set up a portion of the payroll deposit, to automatically transfer funds on payday. Other than putting money in a savings account consider certificates of deposit (CDs), money market funds and other low risk saving investment vehicles which provide a slightly higher return and will help you accumulate savings faster. There are various down payment loans, some are extremely low. However, it is not advisable to take out a low down payment loan; at the end you will have paid more for the mortgage than the actual value of your home. Moreover, when you put in 20% or more down you will not have to pay for mortgage insurance.

Other techniques to help you accumulate money faster for a down payment include; reducing credit card debt, and adjusting your tax withholding. Getting a tax refund in spring is a great present, but what you may not be aware of is that the money you get back is cash is the same money you could have been earning interest on.