How To Raise Money for a Down Payment on a Home

The bigger your down payment, the better the terms you obtain on a mortgage — or any other loan for that matter. 

Getting that money together typically requires more effort for first-time buyers, who don’t have funds from selling a previous property. And while there are mortgage programs that don’t require down payments, you might not qualify for them. Similarly, you could try to get a second loan to cover the down payment but you’ll end up paying more interest. Don’t do that — instead, here are tips on how to save up the money for a down payment.

How to save for a doan payment on a home.

Create a Budget

Budgeting will help you realize where you might cut expenses so that you might reallocate money toward savings. Go through it more than once looking for spending you might reasonably trim — in fact, do this monthly, reviewing how well you stuck to the plan and where you might improve.

To help yourself stick to your plan you might want to begin participating in a savings challenge focused on setting aside money on a regular basis.

Set Up Automatic Savings

Ask your bank to set up an automated deposit of cash from your checking account into your savings account — if you don’t have one yet, open one just for this –at least once a month, but ideally on every payday. This will make sure you don’t forget to set aside money regularly.

Get Higher Interest

Speaking of savings accounts, look for one that pays a higher interest rate than what you’re currently earning on your existing accounts.

Even if it means going to another financial institution, you’ll still be able to make automatic deposits into the new one.

Consider opening a money market account for this — but before you do, read all the fine print to make sure there aren’t any hidden fees, such as penalties for redemptions (withdrawals).

Set Aside That Bonus

If your compensation includes an annual bonus around the end of the year — or any other time — deposit the entire thing in your high-interest paying account. Any other time you receive a lump sum — such as back pay or unused vacation — deposit the whole thing as well.

Get Paid More

If you’ve been at your job for a while, ask for a raise. Although it can seem daunting, don’t let yourself be intimidated out of asking. Instead of going in cold, prepare a statement in advance, starting by writing it out and then rehearsing aloud. Don’t ask until you have spiel perfectly polished and wait for a time when your boss is in a good mood.

To prepare that statement, write out a list of your accomplishments, and research any kind of statistics about the going rate for people with your skills and experience.

You could also throw in data about how hard it might be for your company to have to replace you given current demand for someone with your qualifications (assuming that’s true for your line of work). Then organize what you plan to say so that you make the most compelling points first and make efficient use of time.

However, if you don’t succeed at getting a raise, then it’s time to start looking for a higher paying gig. With the exception of a few sectors, the economy is strong enough that you should be able to find something that pays better.

Start Moonlighting

As long as you’re looking for higher-paying work, you might also want to get a second job, at least for the short term. Look for opportunities that won’t conflict with your full-time job scheduleand that also won’t cut into time you would otherwise spend with loved ones.

Ideally, you want to find a second gig where you can create your own schedule and do something you love doing, so you don’t get burned out or end up losing your first job because of it.

Tap Into Other Sources of Money

Look for other sources of money wherever you can find it. For instance, you might want to make a short term investment in stock — or something like bitcoin — but remember that anything risky might set you back if you end up losing money.

You could also try taking surveys, as long as you stick to the ones that pay more generously; any survey that quotes you a dollar amount right up front is going to pay more than ones that only quote points.

Another approach would be to move back in with your parents so you could save more money for the down payment.

Sell Your Stuff

Most likely you have things in your home that you’re not using anymore and that someone else might be willing to pay for. Either hold a garage sale to unload a lot of things at once or start listing things for sale on Craigslist or eBay.

Don’t forget other things you might sell, like your hair. And if you are younger, you can sell your eggs or sperm — the former pays better. You might even find places that will pay you for donations of blood or plasma if you have a rare blood type.

About That Down Payment…


If you’re finding it difficult to get the money together for a down payment, perhaps you might want to think twice about whether this is the best time for you to buy a home.

In many parts of the country it’s actually a sellers’ market rather than a good time for buyers. Real estate prices have reached peaks of unaffordability despite rising interest rates on mortgages.

You can always wait until conditions change toward circumstances that might better favor buying a home.

Readers, are you in the market for your first home purchase?

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