Pulling together a down payment

When you venture into the housing market for the first time, you want to buy the best home you can afford. But coming up with the usual 15 to 20 percent of your purchase price up front can be challenging.

Here are a few tips on pulling together your down payment:

1. Bank your extra money. Any time you get a tax refund, bonus, commission or birthday check, put it into a separate savings account that you never touch.
2. Live on one income. If you are in a couple, try living on one partner's income while saving the other's.
3. Get rid of your second car. Or your cell phone. Or your cable service. Pare down your lifestyle so that you can add to your savings each month.
4. Get a roommate. Change your lifestyle from solo to shared living. This will reduce your rent and allow you to save more.
5. Pay off your debt. Get rid of debts with high interest rates, such as outstanding credit-card balances. This will ease the strain on your wallet and improve your credit rating. When your debts are paid off, try to save the money that would have gone to payments every month.
6. Take a second (piggyback) mortgage. If you can't get five percent or more together for your down payment, you may be able to get a piggyback loan to cover what your first mortgage doesn't.
7. Ask your lender about Fannie Mae or Freddie Mac products. Both of these Congress-chartered companies have flexible, low down-payment products that allow you to buy a home with down payments of zero to three percent.
8. Ask your family. Parents or grandparents can be a great resource. They may be able to lend you money at a low interest rate.
9. Find out about loan assistance programs. Government organizations like Veteran Affairs and the Federal Housing Administration offer programs that help people who don't have large down payments obtain mortgage financing. Also, check with your state and local housing authorities to find out what they can offer.