The sooner you begin setting aside money and investing it, the sooner you will accumulate the down payment you need. One path to increased savings is decreased spending, particularly frivolous spending on disposable items and fast-food restaurant stops. Buy a foreclosed home. If you qualify as a first-time homebuyer, the IRS exempts you from the 10 percent early withdrawal tax. Investigate public lending programs for first-time borrowers available in your state.
Several states have housing finance agencies to increase homeownership rates for citizens.
Be sure to deduct these closing costs from the cash you have for a down payment. If you move to a new city for a new job, your new employer will often reimburse you for your moving expenses. If you're not reimbursed, the IRS allows you to deduct those expenses, provided you also meet its time and distance tests explained in the instructions for IRS Form 3903 . You do not have to itemize your return to qualify for a tax break. Together with the money you need to pay closing costs, funds needed for moving expenses should also be set aside from the savings you have for a down payment.