Best Ways to Build a Down Payment

First Time Home Buyer, House Down Payment, Building a Down Payment, Home Buyer Tips

Best Ways to Build a Down Payment

 

One of the biggest hurdles for many prospective home buyers is finding a way to accumulate enough money for a down payment. Here are some suggestions on ways to raise the funds you’ll need.

 

  • Start by minimizing nonessential expenditures.
    • Get in the habit of paying with cash and not buying things
      you can’t pay for immediately.
  • Talk to your parents or relatives.
    • They may be willing to make a private loan to you, or they may be willing
      to co-sign on a mortgage.
  • If you have a “whole life” life insurance policy, you can look into borrowing against its cash value.
  • If you own other real estate, you could borrow against your equity.
  • If you’re a first-time homebuyer, you may be able to withdraw money from your IRA or retirement fund
    penalty-free.
  • Consider selling personal items such as a second car or boat.
  • Explore FHA and VA loan programs.
    • Many of these programs require low or no down payments.
  • Consider having an amount withheld from your paycheck and directly deposited into a savings account.
  • Pay down high-interest credit cards and limit your credit card use.

With some discipline and creative strategies, you will be well on your way to saving enough for a down payment.