Have you been considering buying a house but struggling with the feeling that saving for a down payment might be an impossible uphill climb? It doesn’t need to be this way.
The truth of the matter is that while you’re going to need to save a substantial amount, you may not need as much as you think. There are advantages that come with a higher down payment, including getting the very best rates and avoiding mortgage insurance payments, but the conventional wisdom of our parents and grandparents that you need to put 20% down simply isn’t true anymore.
The reality is that, depending on your qualifications and the type of loan you’re applying for, you can get into a house now with anywhere between 3% and 5% down for a property that you’ll be using as a primary residence. That’s certainly not an insignificant amount of money, but with the right plan, it’s definitely attainable.
Here are some unique ways to get money for a down payment.
Take On Some Houseguests
One startup profiled in The New York Times recently had an interesting proposition. They’ll give you something that functions a lot like a loan that can be used toward your down payment. The catch? Prepare your spare bedroom.
The way the startup works is that they will lend you an amount of money for your down payment. In order to pay it back, you share the profits from the rental of your home’s spare room on Airbnb. You can get up to $50,000 toward the down payment.
There are a couple of drawbacks here. First, you need to make sure your lender is set up to handle this. Many lenders, including Quicken Loans, don’t work with these types of programs at this time.
The other important thing to be aware of is that with something like Airbnb, you’re going to be letting a lot of guests into your home. It’s definitely something you have to make sure you’re comfortable with.
Give Your Savings a Boost
You can do all the saving you want, but it’s definitely helpful if you don’t have to think about it. It’s a double bonus if someone is willing to match your funds. Enter BoostUp.
At its most basic level, BoostUp is an online savings account. It has a couple of unique features that make it really easy to save for a down payment for a house, though.
One of the things you can do is set a dollar amount that you would like to be transferred from your bank account to your BoostUp account every day. At the end of five days, the transfer of the total for that time period takes place. Set it and forget it.
You can also have it round up your debit and credit card purchases to the nearest dollar. Odds are, you’re not going to miss that extra $0.15, and it’s another little way to build on your savings without any extra effort.
Finally, this is where things really get exciting. If you’re getting a car or a home, there are partnerships with companies that are willing to contribute to your BoostUp account. If you close a home loan through Quicken Loans, we contribute up to $750 in matching funds toward your down payment.
One of the best things you can do to boost your saving is figure out where you can count money out of your weekly budget and reallocate it toward your long-term goals. There are lots of areas where we can cut back. One easy way to start might be to take your lunch to work instead of eating out or buying from your workplace’s cafeteria every day.
Let’s say you get a daily meal deal at work for $7.50. If you bring your lunch three days a week, over the course of a year, that’s an extra $1,170 back in your pocket. If you really want to get ambitious, you can pack a sack lunch every day and save $1,950. Of course, that’s not counting the money you’ll spend on groceries, but considering how much less expensive groceries are, you’ll still be saving a significant amount of money this way.
Take Your Talents to the Internet
I believe each of us has some sort of talent, skill or special knowledge just waiting to be shared with the world. Better yet, the internet makes it really easy to get your skills in front of people and monetize them in your spare time, with very little overhead.
Services like Upwork and others make it easy to find people looking for your particular skillset and get paid to do work for them. There’s work for everyone from writers to app developers to accountants.
In addition to these general-purpose work-for-hire sites, there are all kinds of sites tailored to people in specific fields. Find the site that best fits your skills.
From the Altar to the Bank
Whether you’re looking to marry people in a big church, a little Vegas wedding chapel or around the steps of the courthouse, when love is in the air, there’s money to be made. The steps for getting licensed aren’t too complicated either. As a professional wedding officiant, you can earn between $500 and $800 per wedding.
If you’re going to do this on a more serious basis, you may want to get ordained by a religious organization, as it may make it easier to marry people in certain churches. Requirements also vary by state. Check local laws.
Have the money for a down payment and ready to start house shopping? Get preapproved online or feel free to give one of our Home Loan Experts a call at (800) 785-4788.
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