For many first-time home buyers, the idea of saving up tens of thousands of dollars for a down payment can be overwhelming. If you’re in this boat, you’re definitely not alone! But saving up for a down payment doesn’t have to be a difficult process that takes several years. The sooner you can get into your first home, the faster you can start building equity, which is a key to financial success. Try out these 5 creative down payment strategies so you can buy a home sooner!
1. Low down payment mortgages: You already know that your down payment doesn’t have to be 20% (that’s a myth!). But as a first-time homebuyer, you have access to several mortgage programs that offer low down payments. Instead of ranging from 10-20%, these mortgages accept down payments as low as 3.5%. That’s a much more approachable number for many first-timers.
2. State and local down payment assistance: Most states and local governments have down payment assistance programs designed to get first-time homebuyers into a home. Your local real estate agent (hi!) can give you more info on the programs in your area.
3. Down payment gifts and loans from family: Family gifts and loans are a very common way for first-time homebuyers to build up their down payment. When it comes to family financing, make sure to put all of the terms for any monetary loan or gift on paper and get it signed by each party to make sure there isn’t any misunderstanding down the road. 4. Crowdfunding: Thanks to the internet, it’s easier than ever to ask for help. A GoFundMe or other crowdfunding platform can help you connect with people who want to help you get into your first home. 5. Retirement account withdrawals or loans: You might have a sizable nest egg stored up in your retirement accounts but feel like you can’t access it. Talk with your retirement advisor to see what your options are for withdrawals or loans–you might be surprised at what you can do with your retirement funds!
Want more information about down payments and how you can save up for one? Just reach out to me at [email protected]