As many wishful homebuyers will likely tell you, collecting enough cash for a down payment is harder than it sounds. In fact, research has repeatedly shown that saving for a down payment is the biggest hurdle to homeownership.

So, if you’re a renter who is hoping to become a first-time buyer, just how long will it take you to save up?

How Much Do I Need?
First, it’s important to dispel the misconception that 20 percent is always required. In fact, according to Down Payment Resource, the median down payment for buyers younger than 37 was just 7 percent in 2017.

There are several government-backed mortgage programs that accept low down payments. The Federal Housing Administration (FHA) offers borrowers the opportunity to buy a home for as low as 3.5 percent down, and the United States Department of Agriculture provides a couple of mortgage plans — the Guaranteed Loan and the Direct Loan — neither of which requires a down payment. There is also the Veterans Affairs (VA) loan program, which enables qualified buyers to purchase a home with virtually no money down and without the penalty of private mortgage insurance.

Conventional mortgage requirements have also eased up over the years, and there are now several programs that require as little as 3 percent down. Some lenders may offer niche products with an even lower down payment.

In addition to these loan options, there are also city, state, and sometimes employer down payment assistance (DPA) programs available, like those offered through the City of Lansing and the Michigan State Housing Development Authority (MSHDA). Each DPA program has its own set of requirements, but most look at factors like income, assets, household size, geographical area, and whether you are a first-time buyer.

Where Do I Start?
While saving for your down payment may seem daunting, Daniel Sugg, chief mortgage lending officer with Michigan First Credit Union, says it’s definitely attainable and he advises potential buyers to lay out a plan.

“First, determine how much you want to put down, so you have a goal in mind,” he said. “Then, establish your budget. This part is scary for a lot of people, but it’s critical. Write down every penny you spend each month so you can see exactly where your money is going.”

Sugg says once it’s on paper, categorize everything into needs vs. wants and find areas where you can make concessions in that “wants” category. For instance, consider eliminating your daily coffee trips or cut back on dining out in order to throw some extra money at your down payment goal.

“Next, examine your debt,” Sugg says. “Look at every line item and see where you can clean things up. Maybe you can refinance your car loan, or maybe you have some high-interest credit card debt you can transfer to a low-interest card and work towards paying it off quickly.”

Potential buyers should also consider savings tools, like microsavings programs that make saving money easy by streamlining the process so you never have to think about it. Acorns is just one available program that rounds up purchases to the nearest dollar (or more) and transfers the difference to a separate savings account.

Once you’ve done some of the preliminary legwork, and if you haven’t already done so, Sugg says it’s important to align yourself with a professional mortgage officer who can help you on your journey to becoming financially fit. A trusted, local lender will go over your available mortgage options, discuss down payment assistance programs, and review your current financial situation and suggest areas of improvement.

“Finally – and most importantly – be patient,” said Sugg. “Homeownership is a big responsibility and it’s something reputable lenders take very seriously. We want to help our clients realize the dream of homeownership, but we want it to be a successful experience, and that takes preparation and time.”