It’s the dream of every first-time home buyer: getting that perfect house. However, it can be difficult to get your hands on that perfect down payment; but fear not! There are many ways you can achieve this goal of yours, and we're here to help you brainstorm some of them. Here are our top 3 tips for getting the down payment of your dreams.

1. Have a good credit score

If you really want to get the best down payment, you have got to work on improving your credit score. If you manage that, then financing will be much easier for you and your chances of getting a good loan with low interest rates are higher.

Your credit score is basically how reliable of a borrower you are seen as by lenders. It’s based on your past credit history, how much debt you have taken out in the past, and whether or not you are able to make payments on time. When applying for a loan with a down payment of 20% or more , this will play an important part in getting approved.

Now that we’ve told you about what your credit score can do for you, let’s talk about how you can improve your score.

The first thing that comes to mind is making sure that your credit history stays clean and doesn't get any black marks on it. This means no late payments; if you are 30 days late paying back a creditor for anything (including loans) then this will be seen as “serious delinquency” by the credit bureaus. If you have any late or missed payments, then be sure to settle your debts as soon as possible and keep an eye on it so that they don’t become a habit.

Another thing is to avoid having too many open lines of credit. An easy way to do this is by closing old credit cards that are no longer being used. If you have too many of these then it can throw off your credit score because the more accounts there are, the less responsible of a borrower you look like to lenders.

Having good spending habits is also important. Lenders want to see that you know how to manage money responsibly and make on-time payments. This means that you should avoid having too many large purchases and instead save up for the down payment of your home.

The last thing we’ll talk about is installing a security system on your credit. Putting trusted people as authorized users to make charges on certain accounts can be helpful; this way they can help if there are any errors with payments and lenders won't be as worried about your score.

If you manage to achieve all of these things, then congratulations! You’re on your way to getting the down payment that you deserve and having an easier time financing a new home for yourself.

2. Save money from your paycheck

This is a pretty obvious one, but it’s still worth talking about all the same.

If you’re going to put 20% down on your home purchase , then make sure that you can actually do this by saving money from each of your paychecks until you have reached said amount. This will give you a much easier time getting approved for a loan and won’t leave you scrambling to come up with the extra money at the last minute.

This means that you should be conscious of your spending habits. If this is something that’s impossible for you, then it might be time to reevaluate where your money is going because there are many ways that people can save more each month; cutting out unnecessary costs and paying bills on time are just a few of them.

The best way to manage this is by setting up an automatic transfer from your checking account into a savings account each month. This ensures that you won’t be tempted to spend the money as it’s coming in, but instead will let it accumulate until there’s enough for your down payment.

Also, making sure to pay off your credit card balances in full each month is important. If you only make the minimum payments then it will take a lot longer to save up for that 20% down because interest rates add up quickly if you aren’t careful with this!

If all else fails and saving money just isn’t an option for you, then consider getting another form of financing besides a loan. This could be through your parents, putting off purchasing completely until you have saved up more money, or looking into different forms of assistance to help pay for the down payment.

3. Get help from family and friends

Another form of financing that is becoming more and more popular these days is getting help from family and friends to pay for the down payment. This can be in the form of a gift or you could also charge them interest, but either way it’s helpful so long as they agree to this beforehand.

The first thing you’ll want to do is set up a contract between you and your family or friend. This will ensure that there are no misunderstandings in the future about how much money is owed, when it needs to be paid back by, etc., so make sure this gets done before starting on any sort of transaction with them.

There’s also another type of agreement that can come in handy here and that’s a promissory note. This is basically an IOU, but it also includes the terms for repayment as well as interest rates if you choose to charge them some.

Finally, be sure that your contract or promissory note has been notarized so both parties are legally protected. If something were to happen to one of you, then this will make it easier to prove your case in court.

This form of financing is very helpful for many people who are trying to get the down payment they need but don’t have any other options available. It can be a great way to reduce stress when buying a home and avoid getting into debt that could otherwise hold you back, so keep this as a possible option for yourself.

partnered post • cc-licensed image by Alan Harder