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- Matched with investor-friendly lenders
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Buying a home is a monumental milestone—and for most, the biggest financial decision they’ll make. But before you can step through the front door of your dream home, you’ll need to cross the first major hurdle: saving for a down payment. Whether you’re aiming for 3%, 10%, or the classic 20%, this 12-month action plan will help you get there efficiently and confidently.
Month 1: Set Your Target and Timeline
Start by defining:
- Home budget: Research prices in your desired area.
- Down payment goal: Typically 5%–20% of the home’s price.
- Closing costs: Expect an additional 2%–5% in fees.
Tools to Use:
- Mortgage calculators
- Budget planners
- Real estate market apps
Month 2–3: Audit Your Finances
Analyze:
- Monthly income vs. expenses
- Debt obligations
- Spending patterns
Start trimming non-essential costs. Cancel unused subscriptions, dine out less, and redirect the savings to a dedicated down payment account.
Month 4–5: Open a High-Yield Savings Account
Stash your savings in a high-yield or money market account to earn interest while you save.
Pro Tip:
- Automate transfers to your savings every payday.
Month 6: Explore Additional Income Streams
Need to close the gap faster?
- Freelance work
- Gig economy jobs
- Sell unused items
Even a few hundred extra dollars per month can significantly accelerate your savings timeline.
Month 7–8: Eliminate or Reduce Debt
Prioritize paying off high-interest debt like credit cards. A lower debt-to-income ratio improves your mortgage qualification chances and may lower your interest rate.
Month 9–10: Review Your Credit Score
A good credit score unlocks better mortgage terms. Do the following:
- Request free credit reports
- Dispute inaccuracies
- Pay down balances
Target Score: 680+ for conventional loans, but the higher, the better.
Month 11: Get Pre-Approved for a Mortgage
Meet with a lender to assess your financials and get pre-approved. This gives you:
- A firm price range
- Increased negotiating power
- Confidence when house hunting
Month 12: Start House Hunting
With your savings goal met and a pre-approval in hand, begin the exciting part—looking for your future home!
Don’t forget:
- Consider additional costs like HOA fees, utilities, and maintenance
- Work with a trusted real estate agent
FAQs
What is the minimum down payment required to buy a house?
It varies by loan type. FHA loans start at 3.5%, while conventional loans can require as little as 3% for qualified buyers.
Is 20% still the standard down payment?
While 20% avoids PMI (private mortgage insurance), many buyers purchase homes with much less—especially first-time buyers.
What happens if I don’t hit my savings goal in 12 months?
You can either extend your timeline, explore assistance programs, or adjust your homebuying budget.
Read Next
Get Expert Financing
- Matched with investor-friendly lenders
- Fast pre-approvals-no W2s required
- Financing options fro rentals, BRRRR, STRs
- Scale your portfolio with confidence
Our advice is based on experience in the mortgage industry and we are dedicated to helping you achieve your goal of owning a home. We may receive compensation from partner banks when you view mortgage rates listed on our website.
