House Down Payment Tips – 4 Ways to Generate Enough Funds
For many would-be homebuyers, coming up with enough funds for a down payment feels like a monumental task. Millennials may even have it tougher, especially if they are simultaneously paying off their student debt and funding their 401(k)s.
If you can relate to the situations above, here’s good news for you: firstly, you don’t necessarily have to put 20% down on a house. Down payments for a home purchase usually ranges from 3% up to 20% of the purchase price. Additionally, the down payment first-time homebuyers made in 2019 was just 6% of the price.
The next good news is that there are plenty of ways you can explore to generate enough funds for your down payment. Here are some creative ideas worth trying out:
1. Get a Second Job
Taking on a side gig is an effective way to earn extra and save extra for your home purchase. In fact, 36% of millennial homebuyers had funded their home down payment using their earnings from a second job.
What’s even better is that there are various gig jobs you can try out today to earn that extra cash. Some lucrative gig economy jobs include working as a fitness trainer or tutor, selling or renting properties, and driving for Uber and Lyft. However, if you prefer working in set hours and receiving predetermined pay, a part-time job in retail or hospitality are your best options.
Whatever it is that you are inclined to, you can turn to the Internet to find a side gig and raise the funds you need faster.
2. Downsize Your Life As You Are Saving Up
One aspect worth reexamining and downsizing is your rent. You may not notice it, but this may actually take up a significant percentage of your monthly expenses. On top of that, it may be making your fundraising project more difficult.
Consider moving back to your parents’ home to save money for the time being. These days, it is common for adult children to move back in with their parents after college graduation to save cash.
However, if this is not an option for you, the best alternative would be to downsize to a smaller apartment. You may also take on a roommate to share in the costs so you can cut down your monthly expenses to as much as a half.
3. Impose a Spending Freeze on Yourself
One of the most straightforward ways to increase your savings is to take in more money than what goes out.
If you are serious about saving up for your future home, you need to pinch pennies and spend only on what is necessary. You may find it tough to forgo your usual morning latte or resist the temptation of online shopping. However, these seemingly small steps can significantly help you reach your down payment goal faster.
4. Leverage State and Federal Assistance Programs
Local and federal agencies offer down payment assistance programs to drive homeownership. There are also down payment assistance programs for first-time buyers, veterans, teachers, and firefighters. These are all things you must take advantage of.
However, keep in mind that you need to meet certain requirements to be eligible for these programs. Prepare the documents you need to prove your eligibility, diligently follow the procedures, and you’ll be well on your way to generating additional funds for your house.
Gathering funds to reach your down payment goal may seem like an insurmountable task. The good news is that there are various strategies you can use to hit your target. However, you will need to get creative and be ready to make the necessary sacrifices for the time being. As long as you keep your goal in mind and work hard towards it, you will be able to get the house you wanted—sometimes even sooner than you expected!
If you require mortgage professionals in Colorado to guide you through your home purchase, look no further than Move Mortgage! Our unique mortgage loan process, low rates, and expert financial advice will empower you to buy your dream home painlessly. Schedule an appointment today to get started!