Are you thinking about purchasing a home in Philadelphia in the next few years? You will need to come up with a down payment unless you are going to apply for a USDA loan, and there are very strict restrictions on which homes you use a USDA mortgage on.

In most cases, you will need to put at least 10 percent down to provide assurance to the bank that you intend to pay your loan in full. Like commercial business loans, a down payment is crucial part of the process, which means prospective applicants will need to put special care into saving enough for a Philadelphia mortgage.

Let's say you are buying a $200,000 home. At the very minimum, you will need to save $20,000, but most banks would actually prefer you have at least $40,000 on the other hand. Yes, that is a lot of money, but the more you put down, the less you'll have to pay over the course of the mortgage.
With that in mind, we wanted to mention some ways you can save. If you are struggling to put money in the bank, here are a few things to keep in mind.

  • Take a look at your expenses and see if there are ways you can reduce or even eliminate some expenses.
  • Put money in a special savings account each month that you can't withdraw from without a penalty.
  • Forgo going on vacations or spending money on other things that are prohibitively expensive.
  • Get a second job to add additional income to your monthly budget.
  • Take care of high interest rate debt as quick as possible so you can eventually put more into savings. Getting rid of your debt will also raise your credit score, which could help you qualify for a better rate.