Second Step for the First Time Home Buyer - Save Money for Down Payment & Closing Costs

Trim those quiet, unnecessary expenses - Replace your cable service with a Netflix or Hulu standard streaming account. Cut the gym membership—Go running instead! Pack your lunch. Start a coin jar, save all your loose change. Turn down your thermostat just 3 degrees, this could shave almost 10% off your electrical bill. Limit those dinners and drinks out at restaurants, It'll make those times you do indulge more special! Work with your significant other, team up and save together.

Open a dedicated account - Open a savings account, where you can see how you're progressing toward your goal. You'll earn interest on your balance, plus there's a lot to be said for the mental benefit of having a specific place to stash your down payment. Learn about CDs and money market accounts that offer higher gains than savings. 

Automate your savings - If you're struggling to put enough money away, consider automating the process. Ask your employer if you can have your paycheck deposited into multiple accounts—if so, instruct it to send a certain percentage of your salary directly into your savings account. Or go through your bank, setting up automatic withdrawals from your checking to savings account that will force you to keep spending in check.

Check out down payment assistance programs - Texas has a variety of down payment assistance programs, which provide money to help people buy a home. Typically in the form of a grant or low-interest loan. Most require your income to be below the area median. But even if you make more, do your research—there are programs that provide funds for higher-income households.

If saving up for a down payment is a challenge, it may surprise you to know that you don't always need to save 20% for a down payment. With certain kinds of loans, you can get away with a down payment as low as 3.5% for FHA loans or even 0% for USDA loans. 

Once your down payment is on a roll, it's time to start looking for a home—and to do that, you'll need to determine exactly how much house you can afford.