Putting a good chunk of money toward a down payment on your house is a good way to save over the long haul. But it can be hard to come up with a sizeable down payment, and still keep up with your current bills, especially if you have student loan debt or monthly credit card bills to pay.

It's enough to make you want to give up and rent forever.  

If you feel this struggle, you're not alone. Our mortgage advisors constantly hear how frustrating it can be to save for a down payment, and they want to share a few helpful tips to take the pain out of putting away that big chunk of cash. 

Talk to a Mortgage Professional ASAP

It's essential to set realistic expectations right away so you aren't just guessing at how much you'll need to save. That's why step one is to reach out to a mortgage professional who can run your numbers.

A mortgage originator (loan officer) will help you determine how much house you can comfortably afford, and from there, figure out which of the loan programs you qualify for and how much you'll have to save for a down.

It's a common myth that you need 20% down to buy a home.

Not true.

There are plenty of loan programs requiring as little as 3% down, and even a few government backed down payment assistance programs in California that can drop that requirement even lower.

Consider this: the average median home price in Placer County as of June 2020 is $515,000.

A 20% down payment on a $472,370 home would amount to $103,000!

A 3% down payment would only require saving $15,450.

Trying to save over $100K is a lot more daunting than saving around $15K. Set the expectation early so you can see the light at the end of the tunnel, and empower yourself to make it happen.

Choose a Bank Account Just for Your Down Payment

It's tough to save money if it's living in your primary checking account where you've got easy access to it. Start on the right foot and allocate a savings account specifically for your down payment savings. Keep it disconnected from your debit card.

And don't just sock your money away in a shoebox. Not only will you miss out on earned interest, you'll also have a harder time proving the money has been seasoned (meaning it has been in your possession for 60 days or longer, making it yours in the eyes of lenders).

Saving is a mental attitude.

The more you see the rewards of your efforts, the more likely you are to continue saving. If you don't have any savings and start trying to save $80,000, the likelihood you'll get there quickly is very low. If you set a reasonable goal and see your savings account grow each month, you'll be more inclined to keep contributing.

Get in the right mindset, and you'll get there before you know it.

Optimize your budget

It's hard to save money when expenses are high. Go over your current budget and organize it like someone who really wants to minimize expenditures. Cutting costs means getting real about your wants versus your needs. 

You might find you're overspending on groceries and choose to shop at a cheaper store or buy in bulk to save money. Get rid of excess expenses you don't need, like gym memberships you don't use, or autopay subscriptions you may have forgotten.

Allocate whatever you need for your bills and other expenses and automatically transfer the rest into savings. If you don't see it, it'll be like it's not even there to spend.

Find More Money

Saving for a down payment is a bigger deal than 20 years ago when home prices were lower across the board. Buyers today, especially first time buyers, are getting creative and finding extra money beyond their monthly paycheck remainder to add to their down payment fund.

Poke around your life and see if you can find any extra cash in these popular places:

• Gift funds from family
• Borrow against or liquidate retirement accounts
• Liquidating life insurance policies a parent or relative may have set up for you as a child
• Selling unnecessary vehicles

If traditional methods have been exhausted and you're still short, check out our suggestions for more unorthodox ways of saving for your down payment, and speed the savings process along.

Season your Funds

This is important: Give your money time to be considered yours. Lenders don't like big chunks of money appearing out of nowhere, and any cash you use toward your down payment on your home must be seasoned. Funds are considered seasoned when they have been in your possession for 60 days or more. Get your assets in there, and get them seasoning before you make an offer on a home.

Believe it or not, saving for a down payment is an achievable goal. We meet people all the time who've been working on their down payment for months or years. They eventually get there, and you can too!