Saving enough to buy a house is not easy, especially in today’s housing market where house prices are so inflated. In a recent Opendoor survey, 39% of first-time homebuyers said they had difficulty finding money for a down payment. If you are in the same situation, here are some strategies that might help you.
1. Treat yourself
Your regular paycheck can be largely monopolized by open bills, making it difficult to carve out room to save for a down payment. But if you get a side job on top of your main job, that money won’t go into anything specific. You should therefore be able to put everything (minus what you owe in taxes) in the bank.
If you are worried that side work is taking up too much of your time, fear not. There are plenty of gigs to choose from, and if you’re pressed for time, you can probably find one that doesn’t require a huge commitment, like driving for a rideshare company.
That said, the more time you are willing and able to commit, the faster you could reach your down payment goal. So if you can push yourself to put in more hours in the short term, you might be successful in buying a home sooner.
2. Cash in your bonus
There is a good chance that you will be able to earn some extra money over the course of the year. It may be a tax refund or a work premium. You can even get extra cash back from your credit cards or get a signup bonus when you apply for a new one. All that extra money could help you get closer to your down payment goal.
3. Reduce your leisure expenses
It is unreasonable never to spend money on hobbies or fun things. But if you’re really trying to finish saving for a house and you’re not quite there, it might be worth sacrificing hobbies for a few months.
Take a look at your budget and identify expenses that are technically unnecessary for most people. These include things like take out, cable, and other types of entertainment. If you are able to temporarily reduce some of these expenses, it could go a long way in helping you buy a home.
Saving for a home can be difficult, but the more money you can put on the table, the less mortgage you’ll have to take out. Plus, if you get a conventional mortgage, making a 20% down payment will help you avoid private mortgage insurance, an expensive premium that makes home ownership more expensive.
Having said that, if you are really struggling to save that down payment, maybe it’s time to consider a more flexible home loan in this regard. FHA loans, for example, allow you to deposit as little as 3.5% of the purchase price of your home, and while they have some drawbacks, they’re worth considering if you don’t want to. really no longer wait to buy.