Buying a house is an important facet of the American Dream, which is predicated on the idea that every American has the equal opportunity to achieve their highest aspirations. Home ownership indicates an individual’s capacity to build enough wealth to gain access to credit, and with it, the opportunity to reap its benefits – the stability of a permanent shelter for the family, savings from rental costs, and so on.
However, achieving the ideal can be a daunting process. Finding the means to afford the standard 20% down payment on a house is one of them But with a bit of resourcefulness, there are ways to get the down payment and ultimately purchase your dream house.
Open a dedicated savings account
Arrange for a certain amount of your paycheck to be deposited directly to a down payment savings account every pay period.
Set aside a portion of your performance and holiday bonuses
Don’t spend everything. According to a financial planner, allocate some on paying off your debt and topping off your emergency fund. And, for aspiring homeowners, fattening up your dedicated down payment savings account.
Save your tax refund
Whether you receive a refund of a few hundred dollars or several thousand, don’t be tempted to spend it on things you don’t need. Instead, keep the money out of sight and out of mind in your dedicated down payment savings account.
The pandemic has allowed us to practice. Sheltering in place meant foregoing planned vacations and regular nights out. Working from home also had us scaling back on shopping for new office clothes or shoes, saving up on the cost of commutes, and foregoing daily lattes at a cost of around $3.50 a day. All add up to a pretty penny, which you can funnel back to your dedicated down payment savings account.
Borrow against your life insurance
Your life insurance has an accumulated cash value, the amount of which depends of how long you’ve had the policy. You may borrow the cash value of the policy for the down payment needed for a home loan. Ask your insurance broker the best way how.
Tap your retirement fun
Check with your accountant for current regulations on borrowing. Some retirement funding allows you to borrow from them to buy a home while some will let you take out the principal balance without a penalty.
Look into home ownership loan programs
Take advantage of home buying programs and grants both from both public and private entities:
- FHA loan is a go-to program for many Americans, especially first-time homebuyers The Federal Housing Administration (FHA) offers insurance to mortgage lenders so that they are not exposed to loss in the case of borrower default.
- VA Loan offers mortgage assistance for veterans and active service members of the military. The VA loan does not require a down payment or private mortgage insurance, and offers competitive mortgage rates. The agency also sponsors grants for veterans who need to adapt homes for service-related disabilities.
- USDA Loan by Department of Agriculture, is designed to assist low-to-moderate income households with buying homes in outer suburban or rural areas.
- National Homebuyers Fund, a non-profit organization offering down payment assistance grants, can provide up to 5% of the mortgage loan.
Get a second job
To supplement your income, go online to find out if there are projects, consultancies, or one-off jobs that fit your skills. Take on freelance work or money-making opportunities on the side. Don’t spend what you earn on your side gigs; instead, use it to fatten up your dedicated down payment savings account.
Looking for single-family homes in Winthrop, WA? Be sure to speak with experienced Realtors when you search for Winthrop homes for sale. Get in touch with us at Coldwell Banker Winthrop, the most trusted local Realtors in the area. With decades of experience, we have the expertise to provide our clients with the best experience in buying a home in Winthrop. Call us today at 509.996.2121 or send an email to info(at)cbwinthrop(dotted)com.