Owning a home is more than just a financial decision — it’s a milestone in life. If you want to save money for a down payment, we have some ideas to help you achieve your homeownership goals without disrupting the rest of your financial plan.
Step up your savings
Most potential homebuyers need several years to build up the money needed for a down payment. Mutual funds offer potentially higher rates of return than bank accounts over longer periods, and every bit of growth brings your home goals closer.
Select a Homestead Funds account
There are many types of investment accounts. For most people, saving for a home means opening an individual or jointly owned taxable account. But it is possible to use funds in a retirement IRA for a first-time home purchase without incurring any penalties. This can be a good strategy for some people, but there are restrictions, so you should discuss the option with a tax advisor.
Account types appropriate for this goal:
Choose your investment type
It’s important to select investment types that align with your investment goals and time horizon. Equities carry a higher degree of risk (meaning they are more volatile) but historically have delivered higher long-term returns. As time goes on, you’ll want to consider an asset mix with fewer equities and more fixed-income funds. Homestead Funds offers funds across these categories to help meet your investment needs.
Related Resources:
Debt securities are subject to interest rate risk, credit risk, extension risk, income risk, issuer risk and market risk. The value of U.S. government securities can decrease due to, among other factors, changes in interest rates or changes to the financial condition or credit rating of the U.S. government. Investments in asset-backed and mortgage-backed securities are also subject to prepayment risk as well as increased susceptibility to adverse economic developments. High-yield, lower-rated, securities involve greater risk than higher-rated securities.
Equity securities generally have greater price volatility than fixed-income securities. The market price of equity securities may go up or down, sometimes rapidly or unpredictably. Equity securities may decline in value due to factors affecting the issuer or equity securities markets generally.
Let’s Get Started
Once you’re ready, start here.
The sooner you begin investing, the more time you have to reach your goal.
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