3 Ways to Find and Save Money for Your Down payment
Whether you are planning to put down a full 20 percent or pulling together the cash for a 5 percent down payment, your down payment could quite possibly be the biggest single cash investment that you ever make. For some, this involves scrimping and saving for years, while others are able to gather the cash with less difficulty, but no buyer in the history of home buying has ever said they have too much down payment money.
Want to know a secret? Many buyers have a treasure trove of down payment resources at their disposal, hidden in plain sight – they just don’t know it yet. Here is a look at where some of this hidden treasure might just be hiding.
- Your Budget’s Biggest Line Items
Home buying is one of those push-meet-shove-type situations. If you are serious about coming up with your down payment funds, sit down and backtrack over your monthly budget or your last month’s checking account statements. Isolate your top 10 budgetary line items and do an internal gut check on whether there is anything on this list that you can slash or eliminate.
Redirecting the dollars you would normally spend on smaller everyday items such as coffee, or going out for lunch in exchange for some of these big-ticket items back into your down payment savings account is like pressing fast forward on your home buying timeline.
- Assets and Objects that You Own
When you need to save money, there are really only two levers you can pull: you can spend less, or you can make more. Selling stuff you already own and don’t actually use is a relatively painless way to make more money to go toward your down payment. If you are really serious about home buying, put everything on the table.
Things buyers-to-be often sell (usually online) include:
- RVs, cars and motorcycles
- designer clothes, costumes, shoes and handbags
- underutilized hobby-related gear (bikes, boats and snowboards)
- furniture and antiques
- electronics, books and CDs (think: TVs, computers, old smart phones, etc.).And don’t forget about your assets! Now, choosing to liquidate your assets is a highly personal decision. Some retirement accounts allow you to borrow against or pull out funds, penalty-free, to apply them toward your down payment on a home. Obviously your specific circumstances will determine if it is advisable for you to tap into your RRSP or TFSA and plug that cash into a house. For some buyers, it may make sense to get your down payment up to 20% by borrowing a few thousand dollars from yourself!
Do not underestimate the amount of cash you can bring in from the things you already own.
- Your Skills and Availability
One way to make more money is to sell off the stuff you have lying around the other is to get to work! Spend your off-time, such as your evenings and weekends leveraging your professional skills or personal hobbies to bring in some extra cash.
Once you get serious about coming up with your down payment cash and decide to be creative about where to find that money, using your skills and your time creatively is a power-packed way to open the financial floodgates.