5 Ways to Save for a Down Payment for a Home

This post may contain affiliate links which may compensate us based on your interaction. Please read the disclosures for more information.

There are many creative ways to save for a home. 

You’ll likely need to save up for a down payment if you want to buy a home. This is a significant expense for many people and can be a hurdle that keeps them from buying sooner. Are you looking for ideas to help you save up for this necessary expense faster? Here are a few ways to save up for a down payment for a home.

1. Get a part-time job or side hustle

If you’re feeling stuck because of the financial limitations with your current salary, you may want to consider getting a part-time job or side hustle. By doing this, you may be able to boost your income potential so you can reach your savings goals faster. Some buyers choose to put in extra hours at another job or gig to afford to make a bigger down payment, so they can take out a smaller mortgage.

2. Consider a different living situation

If you’re currently renting while you save up to buy a home, a good portion of your income is likely going toward your current housing costs. In many cities, rental prices are incredibly high. If you’re feeling limited in how much you can set aside for your future home down payment, you may want to consider an alternative living situation that is more affordable.

If you have extra space in your rental, you may want to get a roommate and charge them rent. Another idea is to see if you can move in with a close friend or family member for a short time while you save aggressively for your down payment. Both of these options can help you free up more income to put towards your home-buying costs.

3. Simplify your life for the time being

If you know that your additional comforts are adding up and impacting how much you can save, you might consider making some adjustments. By simplifying your life and cutting out extra discretionary costs, you can free up more income to save more.

Budgeting apps are an excellent tool that can help you reduce spending in some areas of your life. Once you cut out unnecessary costs, put the money you save in a high-yield savings account so you’re not tempted to spend it elsewhere on unnecessary expenses.

4. Ask for a raise or earn a promotion

If you love where you currently work but don’t love how much money you make, it may be worthwhile to see if you can increase your income without leaving your employer. One way to do this is to ask for a raise. If you do this, come prepared to show what you bring to the company and research wage data for your job so you can negotiate a fair raise.

Another option is to earn a promotion. If you want to take on new responsibilities and expand your skill set, you can apply for a higher position or request a promotion at your current job.

5. Research down payment assistance programs

In some parts of the country, down payment assistance programs are available for eligible home buyers. These programs may be income-based or may require applicants to be first-time buyers, but these programs can help to make buying a home more accessible to more people. Check to see if you qualify for any such programs in your area.

The above methods may help you reach your down payment savings goals sooner. Are you ready to begin researching the mortgage lending process? Look at our list of the best mortgage lenders to learn more.

Our picks for the best credit cards

Our experts vetted the most popular offers to land on the select picks that are worthy of a spot in your wallet. These best-in-class cards pack in rich perks, such as big sign-up bonuses, long 0% intro APR offers, and robust rewards. Get started today with our recommended credit cards.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

 Read More