Most of the time when purchasing residential real estate, a bigger down payment is better. But with rent, car payments, food, utilities, saving for the kids’ college tuition, and a little entertainment now and then, saving for that larger down payment certainly seems far easier said than done. But you can do it. It just takes planning, a little discipline, and some out-of-the-box thinking. To help you with your goal of homeownership, here are 6 ways to generate more money for your down payment in Floresville.
1. Pay Off Credit Cards
The first step toward collecting more money for your down payment in Floresville is always getting rid of credit card debt. It may take a little self-discipline and going without, but you can do it – in fact, must do it. Depending on your balance and interest rates, you could be spending thousands of dollars every year that you could be putting toward a down payment instead. One easier way to help pay those credit cards down is to pay the minimum payment plus the amount of interest that you were billed this month. So say, your balance is $2500 and the interest charged was $12.35 with a minimum payment of $30 for this month pay $42.35 at least. That way your minimum payment due is always paying down the balance. If you have listened to the financial gurus, they do the snowball on credit cards paying off the smallest balance first and then when that credit card is paid off taking that payment and moving it to the next credit card to pay it down faster. It truly is a snowball effect.
2. Try Laddering CDs
After you get a little extra cash in hand, you should put it to work making more money for you. A good place to put at least some of that money is in certificates of deposit (CDs) because they are low risk and generally pretty accessible. The trick, though, is not to put all your money in one large CD, but to maximize the earning power by opening several CDs with different maturity dates (called “laddering”). You could, for example, spread your money across three-month,six-month, and one-year CDs. That way you can make adjustments and shuffle your invested money around to best advantage as savings rates fluctuate, keeping you from being locked into a long-term commitment with all your money when rates are down. The other option is money markets. Having a savings account that is readily available for emergencies is a good thing. You can pay cash for those car repairs instead of charging. While CDs will penalize you for withdrawing early, a money market pays interest without a penalty for early withdrawal. Money markets do have a minimum balance.
3. Take Advantage of Special Down-Payment Programs
While not strictly a strategy for getting more money for your down payment in Floresville, taking advantage of such programs is still a way to get the needed down payment in certain cases. Fannie Mae and Freddie Mac, for example, are government-sponsored agencies that help struggling first-time home buyers come up with down payments. These agencies buy mortgages and then package them as investments, which allows them to waive some or all of the down payment.
4. Dip into Your IRA
The money is already there, and using it toward a down payment could be more profitable in the long run. According to tax law, you can withdraw up to $10,000 from your IRA to buy a first home. And if you’re married and both you and your spouse are first-time home buyers, each of you can make that withdrawal from the respective IRAs for a total of $20,000.
5. Find Overlooked Money
It may sound a little out-there, but this is a way you may be able to find more money for your down payment in Floresville. There is a lot of lost, forgotten, and/or overlooked money out there, and some of it may be yours. According to the U.S. Treasury Department, there is approximately $23.8 billion worth of matured but unredeemed savings bonds floating around – bonds that have simply been ignored or forgotten by owners. So check to make sure you’re not one of them, that you don’t have forgotten bonds that are no longer learning any interest. Also, still other people have money sitting in old bank accounts that they’ve forgotten about. The point is you may have money that you don’t remember having. There is what is called escheated or unclaimed money in the state and each state has a list of their escheated funds. For Texas check here: Texas Unclaimed Funds
Another area is doing things such as having a garage sale or selling items like a boat or extra vehicle. The only thing you have to be very cautious about is being able to prove where the funds came from. If you are already in a borrowing situation you have to source ALL your funds. That means you have to prove where you got the funds. One cannot borrow their down payment money. For further clarification speak to your loan officer. They can explain in better detail.
6. Ask for a Raise
This isn’t for everyone, of course, but sometimes it works. Many people haven’t gotten a raise in a while simply because they haven’t asked. If you ask tactfully and emphasize your accomplishments and value to the company, you just may get that raise. Getting a raise is an easy way to get more money for your down payment in Floresville.
Generating more money for your down payment in Floresville is definitely a smart move. But you also have to be smart about using that larger down payment for the house that best fits your needs and is the best for your financial situation. In most cases, only a good agent can help you safely realize those goals.
Are you ready to buy a Floresville house? We can help! Send us a message or give us a call today! (210) 216-7722
As the Floresville Real Estate Agent – Faye Y Taylor is here for your questions and to help