Tips for Coming Up With a Down Payment
If you’re in the market for buying a home, you are not alone. While the market favors buyers, now is the time to invest in your first home. But this is easier said than done, as saving for a down payment of 10 to 20 percent can be daunting. However, these tricks can help you come up with the money sooner and allow you to start your house hunt. In addition, don’t forget to protect your new investment with a custom-tailored NJ Home Insurance policy.
Pay off the plastic
Paying off credit cards is hardly fun, but getting rid of interest-accruing debt can put more money in your pocket quickly. With Bankrate’s payment push system, you prioritize your debts and pay the most on the one with the highest interest rate. Once that’s paid, shift your focus to the next highest rate and so on. You’ll get the most money-sucking credit card bills out of the way more quickly, freeing up more of your income to go toward building your savings, says Bankrate.
Use special programs
There are government-sponsored programs that cater to those in need of borrowing in a variety of income groups, locales, and professional sectors. Fannie Mae and Freddie Mac programs do just that – and don’t forget to tap into local nonprofits and state agencies, as well.
Tap into your IRA
Tax laws allow you to use up to $10,000 in IRA funds as a down payment if you’ve never owned a house. If you’re married and you both are first-time buyers, you each can pull from your retirement accounts, meaning a potential $20,000 down payment, explains the article. Even better, it doesn’t technically have to be your first and only home purchase this far – as long as you haven’t purchased a home within the last two consecutive years, you can qualify! The early withdrawal fee will be waived, but speak with your trusted financial adviser about the future tax implications of doing so.
Get a second job
If all else fails, get a second job. While this might not be ideal, you can just work a second job temporarily and use the earnings for the down payment. A weekend or part-time night gig will do just the trick!
