How to Save for a Mortgage Down Payment While Renting

Saving for a mortgage downpayment as a renter. pennies stacked in front of a beautiful home.

With interest rates at record lows and the rental market remaining as competitive as ever here in the High Country, the agents at 828 Real Estate see a lot of interest from clients looking to buy their first home. If you are looking at buying a home in the High Country of North Carolina but are still renting, you want to be as prepared as possible to enter the competitive buyer’s market.

Four Steps to Save for a Down Payment as a Renter

You might have a lot of questions on where to start as a first time home-buyer. To help you saving for a mortgage down payment while renting, we’ve come up with four steps to take to begin positioning yourself to purchase your dream home in Boone!

Step #1: Make Down Payment Savings Goals

To start your journey towards saving, you should make some down payment savings goals. You will need a realistic amount that you should save towards your down payment each month. A good way to get an idea of what you should be saving for as far as a down payment goes would be to talk to a lender. At 828 Real Estate we can recommend lenders that will be invaluable in the home buying process.

Once engaged with a lender, discuss what your loan options might be (FHA, USDA, VA, Conventional, etc.). You then can see what percentage of the purchase price your down payment will need to be. You can also use our mortgage calculator to determine your payments and the length of time it will take you to pay your loan off. Once you have a rough dollar amount of what you should be saving, you can set up a schedule to make sure that you are putting enough away each month to hit your goal while maintaining your current renter expenses.

Angela McClean at Movement Mortgage partnered with our team to create a video series that walks you through the mortgage loan process in the High Country of North Carolina. You can use these resources to answer any questions you may have on loan options!

Step #2: Start Paying Off Your Debt

When you know how much house you can afford and have talked to a lender, you should start paying off debts that affect your credit score. Small healthy amounts are okay to have. Understanding your debt-to-credit ratio is essential.

A lender can help you prioritize what debt to pay off and how to quickly do it. If you can set up a timeline to understand when you will have debt paid off and how long it will take you to put aside enough for your down payment, you have a good idea of when you want to seriously ramp up your search for a house in the High Country.

Step #3: Cut Expenses in your Budget

After you have a goal in mind for how much you can afford and save for in a down payment, you may have to reprioritize expenses in your budget.

COVID-19 makes it the perfect time to skip a vacation and throw that money into your savings account.

You could sign up for a personal finance app like Mint that helps you track your expenses. Software like Mint, helps you keep track unnecessary reoccurring bills.

With that being said, consider joining the cable-cutting movement and get rid of your cable subscription. You can also prioritize eating at home and not spend any money on eating out. (If you still want to enjoy eating out, we won’t tell on you. You can use our  best restaurant take-out options guide to find some hot local spots to support.)

All these things can add up and help you achieve your goals to own property in the High Country.

Step #4: Get a Side Hustle

If you have an entrepreneurial spirit you might consider a side hustle while saving for a downpayment as a renter. Use the money you make from your side hustle towards your down payment savings!

Boone has a thriving artisan community that you could use to sell home-made goods. You could thrift and re-sell things or consign clothes. Maybe you have an extra room that you could Airbnb or a yard big enough to allow for camping, in which case you could advertise on Hipcamp.

Make the Most of Your Down Payment Savings

If you were able to focus saving for a down payment, you put yourself into a great position to buy a house and reap the rewards of smart personal finance.

Be sure to consider other costs associated with buying a house including closing costs, attorney fees and inspections.

Having an agent like those on the 828 Real Estate team that have a huge list of contacts in the High Country can make this process easier and more cost effective if you shop those professional services and find a good fit for your needs. Working with first-time homeowners is a joy for each of us so please don’t hesitate to reach out so we can help you get the process started.

About the Author

A Realtor® in Boone and the High Country since 2003, I am passionate about offering my clientele superior service, innovative marketing, and a highly personalized, boutique-style experience. Upon moving to Boone, I started my real estate career as an Investor and was Broker-In-Charge of my own firm. Since then, I have excelled with other real estate firms and built a strong network of client friends. Together with my network of real estate-related professionals, along with my Professional Home Staging business, we will polish your home buying/selling experience with your goals as a priority. 

I’ve lived all over the United States from the NE to the SE and California before landing in Boone, NC. You’ve seen the signs, “The mountains are calling, and I must go?” Well, that was me 21 years ago! I love bluegrass music and, it seems, many of the great pickers were born in NC with a guitar in their hands! I sing, play a little mandolin and keyboards, and can be found at outdoor festivals and concerts when I’m not showing property! I also participate in many of our area’s outdoor activities, from hiking and biking to kayaking- the New River is my summer home! Caring for the needs of High Country residents is also very important to me. I serve in many ways, from preparing and serving meals at the Hospitality House to School Events to Habitat for Humanity Home Builds. In addition, I am honored to serve our community as a Licensed Foster Parent and Certified Guardian ad Litem, advocating for children in the courtroom.

The High Country of North Carolina is unique, with sizeable second home and student populations driving much of the market. It’s important that you work with a Realtor® like myself who is experienced and educated in the area, guaranteeing our success together. The acronyms behind my Broker title are not just letters - they stand for something;

 GRI - Graduate of the Realtor Institute. Brokers holding this designation have completed 12 3-day courses over 2 years or more for in-depth training.

 ABR - Accredited Buyer's Agent. An (ABR®) designation means your Realtor® has made extra efforts to raise the bar with additional courses and proven experience in serving BUYERS.

 SFR - Short Sales and Foreclosure Resource Certification. Short sales and foreclosures are not for the faint of heart, and the courses I've taken arm me with the knowledge to assist clients in this area.

My business approach is founded on building lasting relationships based on commitment and trust, and much of my business comes from referrals from past clients. 

Make me Your Realtor of Choice, and work with someone you can trust to take your needs to heart and find the perfect property for YOU in the HIGH COUNTRY!