Down Payment Savings Tips for the Newbie Home Buyer

by John Stephens 31. July 2014

Down Payment Savings Tips

Saving enough for a 20% down payment on a home can be one of the toughest financial challenges most people will ever take on. With the median existing U.S. single-family home price at about $213,000, that means pulling together more than $40,000 – a veritable mountain of cash.

Yet reaching that goal can be done. It just takes planning, patience and discipline. Here are some tips to help you map your path to home ownership:

Set a Goal

What you need depends on local home prices and how much you can finance. For many programs, a 20% down payment is needed to avoid paying private mortgage insurance (PMI). Not paying PMI can save hundreds of dollars a month and enhance your buying power. Generally, your monthly mortgage payment shouldn’t be more than 28% of your gross income.

Once you’ve figured out how much you’ll have to come up with when it comes time to buy, you can draw a plan to get there based on your income and expenses. Keep in mind prices change, so check the market regularly to be sure you’re saving enough.

Open a New Savings Account

Start a house-fund savings account and have part of your paycheck deposited into it. Safely tucking away the money like this may help you keep your fingers off it, even under tempting circumstances.

Cut Your Expenses

It's easy to get comfortable with routine monthly expenses, such as the cost of cable television, phone services and insurance. But often, you can find a way to pay less after taking a close look at what you’re getting and what you really need.

You may find ways to save money on insurance, for instance. Some consumers are dropping cable in favor of online TV from companies like Netflix, and there may be an alternative phone plan that will net you another $10 a month. Be brutal when it comes to discretionary expenses like manicures, haircuts, memberships and subscriptions.

Don't Forget the Incidentals

It may seem like a major chore, but taking the time to determine all the ways you spend money over a typical month – right down to the coffee breaks, candy bars and other incidental expenses – can help identify ways to save.

For instance, you may be able to put aside an extra $20 a week just by making a sandwich each day instead of buying lunch. Skip the doughnut, bring a thermos and add another $10 – totaling $120 a month extra for your savings.

Keep the Change

Little things – including coins – add up. Collect the pennies, quarters and other coins that come your way. Deposit them each month. Some banks, including several 1st Mariner branches, let you avoid the hassle of sorting and rolling loose change. You may be surprised at how much you come up with each month.

A Taxing Experience

If you can’t keep your mitts off your house fund, consider increasing tax withholdings from your pay. That puts the Internal Revenue Service in charge of part of your money, but you’ll get the excess back after filing your tax return.

Make sure your refund is deposited directly into your savings account too – you don't want to be tempted by a big check. Once the cash lands in the bank, consider investing in a certificate of deposit. CDs generally require you to keep your hands off the funds for the term of the deposit, and they generally pay a much better interest rate than a standard savings account.

More Work

It may seem excessive to go moonlighting, but if you work 9-to-5 weekdays, you may be able to significantly shorten the time it takes to reach your goal by picking up a part-time job. Using a particular skill or hobby can be another way to enhance income and savings – sell your work, look for performance gigs, teach others. If you have an advanced degree, consider tutoring.

Long Haul

Keep in mind that this is probably one of the toughest personal-finance nuts you’ll ever have to crack, so give yourself time.

John Stephens is a Los Angeles-based writer and editor covering banking and finance for NerdWallet. He previously worked for the Huffington Post and Bravo.

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It's Fraud Season: Protect Yourself

by Stacy Tharp 25. July 2014

Who doesn't love summertime at its prime? Long bright days, cheerful singing birds, crab feasts with family and friends, and of course a spike in crime. Summer is an especially big season for debit card fraud. Our security team works hard to prevent you from becoming a victim of debit card fraud so that even if your wallet is lost or stolen, no one else is able to make purchases with your card. It’s equally important that you take action to help protect yourself. Here is a list of things you should do to help protect yourself from being a victim of debit card fraud:

1) Use your debit card often.

If you use your debit card for the majority of your purchases, we’ll be able to get a good sense of your normal spending patterns. If you only use your debit card once in a blue moon, it becomes more difficult to know whether an attempted transaction may be fraudulent.

2) Alert us when you will be out of town.

Most people know to alert their bank when they are leaving the country, or even the state. But even if you are going to Ocean City for the weekend, this may be considered abnormal for you. It’s easy to alert us of a trip, simply give us a call, email a customer service representative or stop in your local branch.

3) Make sure we have your correct phone number(s).

If we think there has been unusual activity on your debit card, the first thing we’ll do is call you to find out whether or not it was you who made the purchase. If we cannot get in touch with you, we’d rather be safe than sorry, and we'll temporarily shut down your card so transactions cannot be completed. Call a customer service representative or stop in your local branch to verify or update your phone number.

4) Be smart about your personal identification number (PIN).

Do not choose something that is easy for others to guess, such as your birthday. Do not share your PIN with anyone and do not keep the number in your wallet.

5) Store your debit card in a secure place.

A card holder in your wallet is a good place to keep your debit card because that makes it difficult to fall out. If you keep your debit card loose in your pocket, it can easily fall out without you noticing when you pull out your keys or phone (this goes for cash too!).

6) Monitor your debit card transactions.

Use Online Banking and/or Mobile Banking to monitor your transactions. If you have debit cards with multiple banks, use Mariner360 to monitor all of your transactions in one place. If you notice any transactions that you did not authorize, contact us immediately.

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Infographic: Are Maryland Private Schools Worth the Price Tag?

by Sara Seeger 23. July 2014

All parents want to give their children the best education possible, and many believe that private grade schools and high schools provide the best opportunities. But as the average cost of private schools continue to rise, people are asking themselves, is the price tag worth it?

Are Private Schools Worth the Price Tag?

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