Sold! 9 simple steps to saving for your first home

Credit: DaytonDailyNews

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Here are seven tips to lower the cost of your first home Work on your credit score way ahead of time Crowdsource your down payment See if Uncle Sam will help Find a housing counselor Pick a real estate agent based on where you want to live Choose a home where you could stay five to seven years Don't get distracted

Credit: DaytonDailyNews

You're probably not trying to purchase a million dollar dream house as a first-time buyer, but coming up with the funds for your first home can make even a modest house seem out of reach.

"The top challenge for would-be homebuyers is the down payment requirement," The Mortgage Reports blog reported, citing a study from Trulia. "Over half of potential buyers claimed saving a down payment was a bigger issue than credit scores, income needed or housing prices."

Explore»RELATED: 9 ways to save for a down payment on a home

There are ways to drive down the cost of a first home and to get the down payment into the 3 percent range. This is not one of those times when you can just put away a little here, a little there. You'll need to figure out exactly how much you'll need and then set a time frame for savings.

It may also require some creativity. Consider these tips to help save for your first house:

Keep the change

This is one of those "every little bit helps" endeavors, according to Realty Times. You can combat the discretionary spending that invades your savings by getting used to paying for daily expenses with cash. Keep all the coins from each transaction and put them aside at the end of the day.

"You'll be surprised how it can add up over a few months," RT noted.

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Shop for a better savings account

Any serious savings plan should involve a careful choice of savings accounts. "Some banks offer special rates or even kick in money if you open a new account and maintain a certain balance," RT noted. "If you already have a good head start on your down payment, this could be a great way to get a bump." While you're evaluating your options, note any fees you regularly pay at your current bank. Try to negotiate to have them eliminated, and if you can't, it might make sense to open fee-free accounts elsewhere.

Spend some money repairing your credit

This suggestion seems contrary to your goals, but it actually makes sense. If you can spend a couple thousand dollars driving down critical financing numbers like the percent of available credit you're using or the number of collections you have active, you may be able to improve your buying position. That could lower your interest rate and the amount of money you'll need for a down payment.

"A conversation with your lender or broker and a detailed look at your credit history may yield some surprising suggestions," RT noted.

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After filling the bottom part of the stovetop Cuban coffee pot with water, spoon ground espresso into the moka pot's metal filter. (Contributed by Michelle Lara/ Cupcakes, Cocktails and Kids)

Credit: HANDOUT

After filling the bottom part of the stovetop Cuban coffee pot with water, spoon ground espresso into the moka pot's metal filter. (Contributed by Michelle Lara/ Cupcakes, Cocktails and Kids)

Credit: HANDOUT

Combined ShapeCaption
After filling the bottom part of the stovetop Cuban coffee pot with water, spoon ground espresso into the moka pot's metal filter. (Contributed by Michelle Lara/ Cupcakes, Cocktails and Kids)

Credit: HANDOUT

Credit: HANDOUT

Make your coffee at home

The math is simple, though the habit can be hard to break. Coffee from Starbucks or another similarly priced café can mean spending upwards of $4 a day per person. That's hundreds of dollars a month that could be going towards your down payment.

Quit the gym

This tip from Blue Water Credit may seem brutal, but you could save $400 or $500 a year if you dropped the gym membership. "Instead, set up a workout area in the garage or the basement and get back to basics, or coordinate a fitness group with friends in a park," BWC advised.

Move in with your parents

Yikes! It's drastic, for sure, but if it helps you save for that down payment more quickly, it's worth it, BWC noted. "By not paying rent for a few months, you'll probably be able to pocket your whole down payment in short order. And remember that when you start looking for a home, make an offer, and go through the escrow and closing process, you can't anticipate if it will take 6 weeks or 6 months, so you'll have the ultimate flexibility by not being locked into a rental lease."

Get a roommate

If the "moving in with the 'rents" thing isn't an option (or would affect your sanity), consider clearing a spare room in your current rental and getting a tenant.

"The extra money – often $400 or $500 a month for one room – can make a big dent in your down payment," BWC noted.

Get rid of the new car

This is another "tough love" savings suggestion from BWC.

"It's not a popular suggestion, but would you rather have a new car or a new house? Sell your new car and buy a reliable used model and put the savings towards your down payment. You may even be able to go from two cars in the household to one, carpooling, using public transport or even biking to work."

Set up a gift account

While you're saving for the down payment, stop accepting presents, BWC advised. Instead of exchanging presents for Christmas, birthdays and so forth, set up a separate account and let friends, family and coworkers know you'd rather they made a small donation to your house fund.

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