Buying a house is a huge financial investment, and for many, it is the largest purchase of their lives. Such a large purchase requires a significant amount of money. If you are looking to purchase a home, here are some fast and easy ways to save and help build up funds so you can purchase a home!
Start A House Fund - A Pay Into It First Each Month: Creating a separate account for your House Fund is critical. You want to separate this fund from your normal checking and savings accounts to help keep those funds from being used for something else. In addition, it is important to pay into first when you get paid. One easy way to do that is to set up an automatic transfer into the Home Fund Account each time you get paid.
Keep Your House Fund in a High-interest Savings Account: You want to have these funds in a safe and easily accessible account so that it is available when you need it. It may be tempting to consider riskier sources such as the stock market, but just as the markets can go up, they can also go down. For short-term saving such as this, it is best to keep it in a savings account. Be sure to check around, including online accounts, for the best interest rate!
Crowdfund Your Downpayment: You can put the word out to friends and family on a variety of crowdfunding websites to help meet your downpayment goal. They could contribute to your fund, instead of getting you a birthday present, for example. There are even sites designed specifically for crowdfunding your downpayment. There can be different rules and requirements such a using a specified lender, so be sure to check each company out carefully.
Look for Cash Incentives: Certain companies will provide cash incentives. One example is Lower, which gives you $500 toward closing costs and more incentives when you sign up.
Save Your Spare Change: Certain apps are now available to help people save for a down payment, for example. One app called Acorns will round up your credit card payments to the nearest dollar and then deposits the change into a designated account. Over time, this can really add up! You can also use websites such as Rakutan which give you a percentage cash back at certain stores when shopping through their site.
Turn Your Rent Payments Into A Down Payment: This is a cool one. If you are a renter, there is a program called Bilt Rewards. Using their app, paying your rent on time is converted into points that can be redeemed for cash to go towards your downpayment. They also have a Bilt Mastercard, and using this service can help improve your credit score, which makes you more attractive to lenders and can get you a lower interest rate and more.
Research Local Downpayment Assistance Programs: There are many different programs depending on where you live. Most are income-based, but some also offer assistance for certain professions including health care workers, teachers, first responders and more.
Check Your Tax Withholdings: If you receive a tax refund each year, you could consider lowering your withholdings so you have more take-home pay with each paycheck. If you chose to do this option, the key here is to send those extra funds directly into your House Fund Account.
As A Last Resort, Consider A Retirement Plan Payout: This is certainly a last resort option and should be researched very carefully and with the advice of a financial professional. Even if there is not a financial penalty for withdrawing funds from your retirement account early, doing so may make it impossible to replace those funds long-term, which could impact your retirement.