In years past, you could get a mortgage approval with little to no down payment. But after the housing market collapsed in 2008, banks became much stricter with their lending guidelines. These days, you have put down a big chunk of money if you want to get a home loan. Most banks won't even talk to you unless you can put down at least 10% of the home's purchase price. (Although, 20% is the magic number if you want to avoid having to purchase private mortgage insurance.)

So how exactly do you come up with all of that money to put down? Here are our top 4 tips:

1. Establish a budget and savings plan
You can’t do anything until you sit down and create a budget. First, subtract your monthly bills from your take home income. That's money that you have to spend. Then, try to find places where you can make some cuts, like going out to eat or money you spend on shopping. Once you've figured out how much you plan to save, play it safe by setting up an automatic transfer into a savings account. That way, you won’t be tempted to spend it! (Set up the transfer to occur as close to payday as possible, so that you never have to cut anything too close.)
 
Luckily, the money will add up fast! For example, if you set up an automatic transfer of $200 every two weeks, you'll put aside $400 a month, or $5,200 a year.

2. Apply for government assistance
The federal government used to offer down payment assistance programs, but those programs got cut in 2008. The good news is that many state and local agencies still offer down payment assistance, so check with your city, county, and state housing agencies to see if they have any programs available and if you qualify. Some states will give you up to 3% of the down payment, closing costs, or both, so it never hurts to ask!

And, if you're a veteran of the Armed Forces, you may qualify for Veterans Administration (VA) loan, which doesn't require a down payment.

3. Get indirect help from the IRS
If you have a problem saving money, get Uncle Sam to do it for you! If you change your withholdings exemptions to zero on your W-4 form, the IRS will take some extra money from your paychecks. Yes, that means you'll get less now, but when tax season comes around, you'll owe less in taxes or have a larger refund, which you can use as a down payment on a home.

4. Use your retirement account
The federal government allows you to withdraw up to $10,000 from your IRA account without having to pay the usual 10% penalty tax for early withdrawals, as long as you tell them that you’re using the money to buy a home. (You’ll still have to pay the regular income tax on the amount you've withdrawn, though!) 401k plans aren't eligible, but you can always roll over some of your 401k money into an IRA account, and then withdraw it.  Ask your company's HR representative if your plan allows for this, and if there are any special rules that apply.

Hopefully one or more of these tips will help you secure the funds necessary to make the down payment on the home of your dreams!