How to Come Up with a Down Payment and Still Pay Your Bills

Posted by Nicholas McMillan on Monday, September 25, 2017 at 1:03 PM By Nicholas McMillan / September 25, 2017 Comment

How to Come Up with a Down Payment and Still Pay Your Bills

Saving enough money for that 20% down payment on a home can seem impossible when faced with paying off college, establishing a new career, and starting a family. However, local assistance programs do exist that can help you reach your goal of homeownership. Some employers offer aid. Often a budget makeover can go a long way toward amassing the necessary funds.

Consider these options for raising the money to buy a new home.

Take Advantage of Where You Live.

The nationwide programs that allowed for zero down payment loans are gone, along with the federal home buyer tax credit and the use of tax credit funds toward a down payment and closing costs. What once was driven by the federal government has moved down to the local level. Options abound for people with varying levels of income, particularly those with limited means or those who are first-time home buyers. These funds are not inexhaustible and often require legwork or have very specific buying requirements. Do a search for aid, paying close attention to .gov websites, and consult with local realtors or brokers.

Enlist Support from Friends and Family.

Some programs allow a portion of the down payment to come from gift money. Be wary, however, that this method of raising funds can strain relationships in the tightest knit families. Soon-to-be married couples can use the FHA Bridal Registry program to place checks from wedding gifts into a down payment account.

Ask Your Employer.

Some employers offer financial assistance toward a home purchase. First responders, for example, can receive aid from universities and municipal departments. Large companies offer home purchasing aid to lure recruits. Overseas companies seeking foreign workers use this tactic often. Check what an employer offers and consider negotiating some aid into a contract if possible.

Tighten Budgets

Tracking spending is key in getting a budget under control. Go over banking statements and isolate the top expenditures. Are they necessary? Can they be eliminated? Consider the daily cost of a latte and eating out for lunch. Expenditures that cost $20 a day add up to $5,000 in a year. Eliminating or altering this one habit can lead to real savings.

Find Alternative Forms of Income

Alternative means of income abound in the modern world. Selling belongings, creating items to sell, offering services such as child care or home cleaning, and much more, offer people new ways to bring in some needed cash. Take a long look at what you own that could yield a decent profit. The sale of a well-maintained boat, motorcycle, or restored vintage car might be all that’s needed to net the money needed for a down payment. Additionally, leveraging hobbies and professional skills in the form of side jobs can provide much needed stimulus for your earnings, accelerating the home-buying timeline.

Consider Other Assets

In some cases, borrowing money from one’s retirement accounts to make a down payment is a penalty-free and sensible option. Specific circumstances vary, but an extra few thousand dollars borrowed from savings could be all that’s needed to have the necessary funds for a down payment.

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