5 Ways to Save Cash for a Down Payment

July 10, 2008 By Tisha (Kulak) Tolar

Buying a home is one of the biggest financial decisions a consumer can make. With the increasing difficulties the home sales industry is now facing, most lenders will require a down payment of some kind, in order to qualify for a home loan. It wasn’t that long ago when lenders were more comfortable with the ideas of offering loans with no down payment requirements but times have definitely changed.

While most lenders will require a down payment in order to qualify for a loan, there are other advantages to putting down a payment towards the purchase of a house, namely that your monthly payments will be lower. It is also equity being put into the home upon closing the sale.

So how can you save the money you need for a down payment? Here are 5 ways you can come up with the cash to afford your new home.

Sell Something Valuable

Many people have a boat, second car, or collectible keepsakes that do nothing much more than collect dust. If the prospect of a new home is more enticing than the idea of your baseball card collection, sell the cards to the highest bidder and get ready to move.

Establish an Automatic Savings Plan

If your employer allows for direct deposit of payroll, sign up to have a percentage of each paycheck directly deposited into a savings account. If you do not see or have access to the extra cash, you won’t be tempted to spend it. Plus, it will help confirm your commitment to buying a house.

Explore Private or State-Sponsored Programs

Do your research about the different programs that specialize specifically in providing down payment money to purchase a house. Rules and regulations do apply and will vary but it may be a great alternative for people with no other options.

Approach Your Boss

If it is customary to receive bonuses at work and you feel comfortable speaking to your boss about personal information, ask if a bonus is coming your way in the near future. Explain your down payment situation. The worst they can tell you is no.

Get Back Your Loan

If you have ever leant money to a friend or relative, now is a good time to ask for it back. This may not be the best route to take but often people forget about a loan and are happy to repay it after a gentle reminder.

Posted in lending, loans, money, mortgages

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