Cover story: Making down payment less daunting

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Ms. Cassell said consumers should consult with an accountant before opting to borrow from their retirement funds because of the potential for tax implications. She suggested starting on a small scale to save for a down payment.

“We recommend keeping a daily diary of spending so that people can see more easily where they can spend less money on a day-to-day basis on things like carryout coffee,” Ms. Cassell said. “We also recommend the pay-yourself-first method of saving, setting up a savings account and transferring or depositing money automatically from each paycheck so you don’t even realize you ever had it to spend.”

Mr. Devlin said if buyers are heavily in debt, he suggests they pay off the largest debt as soon as possible and then save the extra money they were spending for a down payment.

“Another idea is to look at your current lifestyle versus your anticipated lifestyle and save the difference between your current rent and what you expect to spend on a mortgage payment every month,” Mr. Devlin said. “You can also put your utilities on an annual payment plan, which makes it easier to save.”

Mr. Devlin recommended establishing a savings account for an emergency fund, a long-term account for retirement savings and another account for a specific goal such as a down payment.

“Some people get a part-time job for 18 months or a year to build up their savings, but I think if overtime is available, that’s even better than a second job because usually you can earn more with overtime,” Mr. Devlin said.

Ms. Johnson said the tried-and-true method of borrowing from parents or getting a gift from them is an option for some buyers, but she also said some buyers sell items on eBay or Craigslist to build up funds.

“The main thing is just to commit to it, to sacrifice for a year if you need to, eating out less, going out less and having a savings goal to meet every month,” Ms. Johnson said.

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