10 Creative Ways To Raise Money for a Down Payment

• Author: Myron Hansen
• Posted: 2024-01-16

When buying a house, the down payment is an essential factor to consider. A down payment requires paying an initial sum upfront to receive a mortgage loan. The larger your deposit, the lower your monthly repayments will be. However, for numerous first-time homeowners, saving adequate money for this expense can seem challenging. The following are 10 creative ways to raise money for a down payment:
 

1. Take on a Side Hustle

Selling items online, driving for a ride-sharing company, or taking on freelance work are great ways to generate extra money towards the down payment. For example, if you have web design, graphic design, or writing skills, consider monetizing them through freelance platforms. Most of these skills don't require significant investments, and you can do them from the convenience of your home.
 

2. Have a Yard Sale

Spring cleaning is the perfect opportunity to make money from the things you no longer need. Have a yard sale to eradicate unwanted items and make cash for your down payment. Consider hosting a bigger yard sale by inviting friends and family. You can leverage social media platforms to advertise the sale and draw a larger crowd.
 

3. Get a Part-Time Job

If you have time outside your regular job, consider picking up a part-time assignment to make extra money. You can look for roles in retail stores, restaurants, and other local businesses. Some jobs have flexible hours, so you'll still have time to work on other projects and spend time with your family.
 

4. Ask Friends and Family

Your close circle of family and friends may be willing to lend you the money for a down payment. Make sure to draw up a contract that specifies when and how you will pay them back. If you can't afford to pay back the full amount at once, arrange for reasonable installment plans. It's advisable to insist that you'll refund any interest they may have to pay for loans from financial institutions.
 

5. Start a Crowdfunding Campaign

Crowdfunding sites like GoFundMe and Kickstarter are popular resources for getting people to contribute money towards your cause. Create an account and explain why you need the money for the down payment. Keep your campaign up-to-date with photos and updates on your progress toward your goal.
 

6. Save Your Tax Refund

Instead of using the extra money from your tax refund to buy something unnecessary, use it towards your down payment. Tax refunds are a great way to get an influx of money quickly, so take advantage of it. By doing so, you can get closer to your goal much faster than expected.
 

7. Look for Grants

Grants are a great way to get money without making any payments. Look for local grants and scholarships specifically designed to help first-time homeowners. If you have served in the military, look for grants designed for veterans. The beauty is that you won't have to pay back the amount. However, read the terms and conditions of each program carefully before applying.
 

8. Leverage Your Loyalty Points

Do you have a lot of loyalty points stashed away? Use them to buy items that can sell for cash. Many people forget they have hundreds of dollars lying in their loyalty accounts. It's a great way to get the money you need without selling items or investing in anything. Most stores and airlines offer loyalty programs, so take advantage of them. You'll save a massive amount to top up your down payment.
 

9. Negotiate With the Seller

If you are working with a real estate agent, they may be able to negotiate a lower down payment in exchange for a higher overall price. It could help you get the house without raising much money upfront. While it might mean a higher monthly payment, it's still better than waiting longer for the down payment.
 

10. Take Out a Loan

If you need help with the above options:
• Consider taking a small loan from your bank.
• Ensure you find one with the lowest possible interest rate and flexible payment terms.
• Remember to work out a budget to meet the monthly payments on time. If you want to sell your home, you'll need to cover the loan in full.

Regardless of the option you pick, research all available options carefully. That way, you can find the best solution for your needs and lifestyle. However, involve various experts because you want to make a good decision in raising the money. It'll help you make the right decision and find the best way to come up with a down payment.