- Pay down your debt: Get organized by writing out all debts owed, monthly payments required, and come up with a game plan. Some people prefer paying the smallest balances off first or try tackling the highest balance to watch it “melt away” over time. You may even be able to lower your payments by consolidating your debt. If possible, pay more than the minimum amount owed to speed up paying it off and lower your overall interest cost over time. Concentrate on one balance at a time until they are payed down or gone completely! Once this is done, you can use those monthly payments to put towards your down payment. Lowering your debt-to-income ratio much faster also improves your chances of getting approved for a loan once you have saved your down payment.
- Get a roommate: Finding a roommate can help you pay down your debt as well as save for a down payment while on the road to becoming a homeowner. If you’re someone with an extra bedroom, why not rent it out? Be sure to check your lease agreement for sub-leasing requirements first or see about adding them to the lease.
- Skip vacations for a year: The average amount spent on a vacation is $1,500-$2,500. Just think: if you are someone that takes multiple vacations, you will put away about $6,000 a year towards the down payment for your home.
- Take advantage of down payment assistance programs: There are many Housing Finance Agencies out there for you to choose from, specific to the state you live in. Many cities and counties have adjusted criteria for local median income and home prices or have first-time home buyer programs. Another great way you can receive down payment assistance is through your employer. Check with your HR department, your employer may have some great programs available to you!
- Have your down payment gifted to you: If you are planning a wedding, why not ask for monetary gifts to use towards a down payment? You can also use graduation funds if you are a recent graduate. However, there is always the possibility that your parents, aunts/uncles, or a sibling may give you a down payment if you ask for help.
If home purchasing is on your to-do list, any of these options could help give you the running start of a lifetime.