If you’re buying your first home in Southwest Florida or beyond, you’ve probably given your down payment a lot of thought. After all, the larger of one you can put down, the lower your monthly mortgage may be. In addition, placing an offer with a strong down payment can help you move forward in the line when it comes to other buyers. On that note, I know that first time home buyers are always looking for ways to maximize that down payment, by almost any means necessary. So here are some I recommend that can really add up over time!
Cut on luxury expenses
This want could be very personal as we all have some pleasures that we simply can’t do without – maybe your premium coffee! But think of where you can give up something for a year leading up to your down payment. You will be surprised at how much you can really save when you’re conscious of your spending habits.
Sell your old stuff
You may have an old guitar from college that’s been gathering dust. Or perhaps you were big into a sport, but you’ve recently switch tracks in your life. Selling those old items can net a little extra money in a hurry on sites like Craigslist.
Stay with family for a few months
Because your saving up for your first down payment, you’re probably also currently paying rent. But staying with family that last month or two before you make an offer on a home can save you some serious cash in a hurry.
Get rid of credit card debt
That year leading up to your first down payment can make a difference in terms of any annual percentage rates that are adding up on credit cards. At 10% or higher, any dollars can add up over the life of that debt.
Use cash back rewards
Speaking of credit cards, if you’re disciplined about paying them off every month, those cash back points can also help with your down payment. While it may be tempting to think that a few extra dollars here and there aren’t much, over a year, they can really make a difference.
Set aside your tax refund or bonus
This one might be a no brainer, but you’d be surprised how often it’s overlooked. By earmarking your next tax refund or bonus for your down payment, you’re immediately giving your funds a boost without a second thought.
Pull out funds to a separate account
Another simple trick is to automate your accounts in a way that you’re pulling out a certain amount every month and placing it in a separate account. This has the benefit that you won’t simply spend money that’s in your account, helping you to discipline your spending habits at one of the most important times in your life.
Pick up a side gig during the weekend
From Uber to Craigslist, picking up a side gig, even for a few months can really help you add to your down payment. You could even try a few!
Invite over family for a party
You might be wondering how this one will help you with your down payment. But it’s simple: by throwing a get-together and giving family a chance to contribute to a down payment fund, you’re opening the door into letting them into your fun of owning your own home. Even a little bit of money from this sort of event can help!
What about you, what tips do you have for first time home buyers to save a little extra cash for their down payment? Leave a comment and share your idea!
Terry Records
Broker/Owner
Records Results Real Estate
Residential Sales and Property Management Service