A down payment on a home is often the single largest cash expenditure of most peoples' lives. Whether you're putting a nice chunk down or scraping up 3.5% for a loan, no one ever said coming up with the money is easy. If you're looking for some ways to add up cash for your down payment, consider the following ideas.
1. Revise your budget.
First things first, start making budget cuts. You'd be surprised how much that cup of coffee adds up. If you spend $5 on coffee in the morning and then let's say $10 on lunch, you're spending more than $400 a month on those things alone which comes out to more than $5,000 a year! What else can you cut out? A $20 yoga class? Just watch a YouTube video at home! A pricey cable package? Try Netflix or something more basic. Narrow your budget down to your bills and priorities. Once you're in your new home you'll have plenty of time and resources to afford the things you enjoy. But for now, stick it out- you need to save that $$.
2. Sell your stuff.
It's time to let go of stuff you've been hanging on to for keepsake. That shirt you like but never wear? Sell it. Sports gear that's been sitting in a box? Sell it. Old laptop? Sell it. Whatever you don't use can be traded for cash somewhere. There are so many outlets to sell things on these days too: Facebook Marketplace, OfferUp, Letgo, Poshmark, Ebay- the list goes on and on. Don't underestimate the amount of cash you can acquire by selling your used stuff.
3. Use your talents.
Use your skills and hobbies to spend your free time making money. Whether it's tutoring, coaching, bookkeeping, or even dog walking, your time is valuable and can be used to make money. Spend your free evenings and weekends utilizing your skills for some extra cash on the side.
4. Your assets.
If you have assets like a retirement account, sometimes you're allowed to borrow against or pull out funds, penalty-free, to apply them toward a down payment on a home. This is a personal decision that should be careful thought through, but if you're able to tap into your 401K or IRA, you can get a nice amount of cash for a house. Talk to your financial advisor and see if you can borrow some money from yourself!
5. Your family
"Gift money" is just what it sounds like- and it's okay to ask your parents and relatives for help. Some people are uncomfortable asking for money, but parents and families know the hard work it takes to get into a home and most of the time are happy to offer what they can. If your auntie or grandma wants to help you out with some gift money, express your gratitude and chat with your mortgage professional about how much of your down payment you can satisfy with gift money. Most of the time lenders require gift money to be contributed with a letter that states that the giver is a relative and the money is a endowment, not a loan.
Try Waterfront's free home evaluation form to see what your current home is worth. Then go to our customizable home search tool to find homes available in your price range with your all your wants and needs.