Get the Down Payment For Your Home In Less Than a Year

• Author: Toni O'Hara
• Posted: 2024-08-04

Real estate is one of the best ways to invest your money. However, most people struggle to obtain the resources in order to invest in real estate due to the high cost of rent. However, it is possible. Here are our tips on how to collect a down payment for your new home in less than a year.
 

1. Supplement Your Income

Ultimately, you need to have more money in order to accumulate the money for a real estate down payment. Of course, that's easier said than done. In order to collect your down payment, you should look for ways to earn more money. This may mean taking more hours/responsibility at work or finding a side gig. This additional money should be exclusively dedicated to your down payment.

There are a lot of ways that you can earn extra income, including freelance work, ride-share opportunities, selling your crafts/goods, and taking online surveys. When you find what works for you, dedicate about 10 - 20 additional hours a week toward your side gig to see the money start flowing in.
 

2. Reduce Your Expenses

If you don't have the time to take part in more work, you may need to reduce the amount of money you spend each month. Look at your budget to see where you may be able to cut down on expenses. For example, you can cut back on luxuries, such as alcohol, eating out, and premium streaming services. Once again, you should take the money you save and place it in a special account dedicated specifically toward your down payment.
 

3. Every Little Bit Counts

If you save $10 a day, you will get $3,650 in a year. Ultimately, that's not enough for a down payment for a house. In July 2023, the median price of a house came to $436,700. When you put down a down payment, you will need as much as possible. 10% for a $300,000 house is $30,000. If you put down less than 20%, you'll need to pay for additional insurance known as private mortgage insurance (PMI).

PMI insurance covers your lender in the case that you can't pay your mortgage. It's required if you put down less than 20% on your real estate investment. The majority of Americans must take out a PMI. However, it's an additional expense that can significantly increase the overall cost of your house. Therefore, your goal should be to put down 20% on your house. Of course, that's difficult if you're trying to collect your down payment in less than a year.

In order to reach your goal, you should work to collect as much as you can each and every day. Sometimes, a little bit helps. Therefore, you should collect your change and save money in small areas whenever possible, such as not ordering delivery when you can pick it up or carpooling. Save your change in a change jar. Or you can download apps that will save money for you every time you swipe your card.
 

4. Use Available Resources

The government wants you to own a house. So do your friends and family. Therefore, you probably have more resources than you realize. However, you need to search for help. Start by letting the people in your life know about your goals. You may be surprised who may be willing to help you. However, most people don't have a wealthy family to help them. Luckily, there are government resources, as well.

Look into your local housing administration to learn about any programs that apply to you. Many areas have programs for first-time homeowners or people with special needs. Take advantage! However, these offers won't fall into your lap. You'll need to search them out.
 

5. Buy Smart

If you really want your real estate investment to work out for you, you'll need to buy smart. Research the market to learn the best time to buy. Timing is important when it comes to buying real estate. Some markets are better for sellers, so you'll want to wait until the market turns around. You'll also want to buy in a smart location. If you live in an area with expensive real estate, you may need to look into your options outside of the county or state. A small commute can save you a lot of money. Don't forget to consider taxes when looking into location, as well.

You can get the house of your dreams in less than a year if you work toward it. Start today, cause it's not going to happen overnight.