How to score your down payment for your first home

Preparing to buy your first home is both exciting and stressful. While the thrill of having your first home can never be matched, saving up for it can seem impossible. Some potential homeowners feel dejected because they don’t think they have enough for a 20% down payment.

But with a thorough financial plan, you can save enough money for a down payment on the home you’ve been eyeing.

There are many down payment schemes depending on the real estate developer. Majority of these developers offer flexible or staggered payment schemes on equity. Some will ask for as low as 5%, and some will have flexible payment schemes to make it easier to pay for your down payment.

Find out how much your seller requires so you know your goal.

How to save money for a home down payment

Now that you know how much you need, you can start saving using the following tips.

Build a budget

The first step in your saving process is to plan a budget. If you don’t already track where your expenses are going each month, you better get started. You can’t properly optimize your budget if you don’t know where your money goes.

Look at your bank statements, credit card payments, and online purchases. You can use an app or an Excel sheet to track your expenses moving forward. See where your money goes each month: do you spend a lot on online subscriptions? Take-out food? Coffee? How much do you spend on rent and utilities?

After you’ve categorized your expenses, see where you can start cutting back. Maybe you can lessen the number of times you order takeout food or go out so you can save for your down payment.

Set a realistic and definite budget for yourself and commit to it. We recommend committing to deposit a specific amount of money each month into your home down payment account. You can do this by saving a certain percentage of your salary each month. This will give you a better idea if you can pay for your monthly amortization should you apply for a home loan.

Try downsizing

Downsizing is the process of reducing your expenses and living below your means while you save. This could be the fastest way to save for your down payment.

When you downsize, you reduce the amount you pay for necessary expenses so you can add the money to your savings.

Some ways of downsizing include moving into a smaller apartment, selling one of your cars, or even switching from the air conditioner to an electric fan.

Saving for your first home down payment can be difficult but it isn’t impossible. By creating a proper plan and committing to it, you can achieve your dream of buying your first house.

Let Metrobank help you purchase your dream home. Learn more about our home loan options now.