5 Easy Ways to Save Money for a Down Payment on a House
Did you see the home of your dreams but don’t know how you could ever afford the down payment? If you’re struggling to scrape together money to buy your dream home, you’re not alone. Roughly 29% of renters in a Bankrate survey said they were delaying home ownership because they couldn’t afford a down payment. Another 16% of survey respondents said they didn’t believe their credit was good enough to be approved for a mortgage. The good news is, there are simple ways to make your home ownership dream a reality. Here are five steps.
1. Adjust spending
Do you buy whatever you want, whenever you want, and disregard your bank account balance? All your savings efforts will go to waste if you don’t get a handle on your spending habits. If you’ve never been thrifty, now is the time to change that. First, create a budget. Once you’ve determined how much you’ll need to save, and you’ve decided how long it will take to save that amount, establish a plan. A budget will help you stick with a monthly spending limit.
2. Let your employer help you
Don’t forget to review what’s available to you through your company’s benefits plan. Some employers offer programs to assist employees with a down payment. This is a benefit often available to college and university employees as well as employees of state or local government. If you’re not sure what your company offers, reach out to your human resources representative and ask for a rundown of available benefits. You might be pleasantly surprised.
3. Look for a Down Payment Assistance program
There are plenty of down payment assistance programs out there, especially if you’re a first-time homeowner. If you’re afraid you won’t be able to find one, don’t worry. There are more than 2,000 down payment assistance programs across the country, according to Realtor.com. A report released by RealtyTrac and Down Payment Resource found that buyers who use down payment assistance programs save an average of $17,766 over the life of the loan, reports the National Association of Realtors.
4. Save windfalls
If you’re lucky enough to get a significant windfall, this could help you reach your savings goal within a shorter time frame. Although you might want to go shopping for clothes or purchase a new tech gadget, a windfall could help you buy a new home. Set aside raises, bonuses, tax refunds, and any money received for birthdays or other special events. Before you know it, you’ll have a nice cash cushion.
5. Get a side hustle
Create an additional source of income through a side hustle. If you can squeeze in some time outside your primary job, you could make a decent amount of money. A recent Bankrate study found the average income earned per month from a side hustle is $686. According to Bankrate, it’s possible to earn more than $8,200 within a year. Furthermore, if you work a second job at least once per month, you can earn an average of $836 monthly. About 15% are lucky enough to make more than $1,000 each month.
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