Buying your first home is one of the biggest decisions you will ever make in your life and it can bring about lots of pride, joy, and contentment. But before you get to that place, you need to put together a down payment. Often times, this is a stressful process to take on.
Here are 9 creative ways to save for your down-payment while taking the stress away.
Get a registry.
If your getting married, forget the traditional registry with house linens, and fancy plates. Use sites like Feather the Nest and Hatch My House to raise your down payment. Hatch My House says it’s helped Americans raise more than $2 million for down payments. In your invitations, include a note that in lieu of traditional gifts, you are accepting gifts towards the purchase of your new home.
Ask the seller for help
When sellers want to a get a deal done quickly, they might be willing to assist buyers with the closing costs. Fewer closing costs = more money you can apply toward your deposit. This is call a “seller’s concession. Your real estate agent should be able to help you negotiate from 2 – 3% of the overall sales price in concessions to help with the closing cost.
There are limits on concessions depending on the type of mortgage you get. For FHA mortgages, the cap is 6% of the sale price. For Fannie Mae-guaranteed loans, the caps vary between 3% and 9%, depending on the ratio between how much you put down and the amount you finance. No matter where they net out, concessions must be part of the purchase contract. Be sure to ask. You have nothing to lose.
Look into Government Options
The U.S. Department of Housing and Urban Development, or HUD, offers a number of homeownership programs, including assistance with down payment and closing costs. These are typically available for people who meet particular income or location requirements. HUD has a list of links by state that direct you to the appropriate page for information about your state. HUD offers help based on profession as well. If you’re a law enforcement officer, firefighter, teacher, or EMT, you may be eligible under its Good Neighbor Next Door Sales Program for a 50% discount on a house’s HUD-appraised value in “revitalization areas.” Those areas are designated by Congress for homeownership opportunities. And if you qualify for an FHA-insured mortgage under this program, the down payment is only $100; you can even finance the closing costs. For veterans, the VA will guarantee part of a home loan through commercial lenders. Often, there’s no down payment or private mortgage insurance required, and the program helps borrowers secure a competitive interest rate
Look into Lender Programs
Many lenders offer programs to help people buy a home with a small down payment. “There are a lot of programs out there that need a total of 3% or 3.5% down.”
FHA mortgages, for example, can require as little as 3.5%. But bear in mind that there are both upfront and monthly mortgage insurance payments. (PMI) Some lender programs go even further. TD Bank, for example, offers a 3% down payment with no mortgage insurance program, and other banks may have similar offerings. Check with your local bank. They may have their own first time homebuyer programs.
5. Leverage your social network.
Are you a social media influencer? Wingsplay will pay you to share videos on Facebook, Twitter, or your blog. Every time one of your followers watches the video you’ve shared, you get paid
6. Start Driving
7. Become a driving billboard.
If you don’t mind having your car transformed into a billboard, FreeCarMedia will pay you up to $400 a month if you wrap the entire thing with an advertisement. More subtle back window advertising can pay around $50 a month.
8. Make it automatic
One of the easiest ways to get more money into your savings account is to set up an automatic deposit. Instead of having your entire paycheck deposited straight into your checking account, select a specific amount to go into your home buying savings account automatically. Just set it and forget it!
Get an accountability partner
Enlist a good friend or family member to help keep you on track. Break down your goals weekly, and set a day every week with your accountability partner to evaluate and discuss your progress along the way. You’re likely to feel more guilty telling someone else that you didn’t meet your goal than if you were simply making the commitment to yourself.
Whether you have a down payment of 3%, 5%, or 20%, or just need to come up with some extra cash for closing costs, all it takes is a little creativity to get there. From saving more of the money you already make, to increasing your income with out of the box money-making ideas, a little extra effort can help you get into your new home in no time at all. Get creative, start saving and do your research.