Although house hunting and buying a property can be exciting: a lot of that can vanish the moment you realize how much you owe for a downpayment. The average down payment is around twenty percent of the home’s value, which means it can be in the tens of thousands of dollars. Unfortunately, most Americans don’t have that much money saved up: which can pose a huge problem.
Here are some of the best ways to afford a down payment on the home of your dreams!
Save Over Time
This is the most obvious and most frustrating answer. Saving money up over a long period of time is the simplest answer. The best way to do this is to downsize your living situation so you’re in the smallest and least expensive apartment you can afford and then move forward with saving any extra money you can. If you work off of dual incomes, many try to get all of their expenses covered out of one income and then put the other completely towards saving money. This can be a lot of effort, but it’s the simplest answer to this problem.
Ask To Have It Included in Loan
Some lenders will agree to fold your down payment into your home loan. This ensures that you will eventually have to pay it, but it’s in easier bite-sized chunks instead of a large bill of forty thousand dollars the moment you buy Knoxville real estate. Unfortunately, this does increase how much you’ll have to pay every month, but that can be manageable as long as you budget correctly when purchasing your property.
Look for Grants
Research your area, and look at any grants for first-time homeowners or profession-specific grants. For example, in some states, like Texas, there are grants available to teachers trying to buy a home that covers the downpayment and helps with the interest rates. Although this isn’t available to everyone, it can be a great option if you fall into the categories they’re looking for!
Look Into Government Programs
Several government programs are excited to help people buy their homes. Unfortunately, some of these can have strict guidelines and rules, so it’s a good idea to research thoroughly before you make this change. Also, homebuyer assistance isn’t free money, you will have to pay it off to some degree, but through an FHA grant, you can more easily handle the bills as they come at you.
Ask Family for Help
This option can have complications. Depending on your loan, if family or friends have given you money, the lender will want to have access to the account of your family member to ensure that they’re not financially supporting you. Asking family for help can also complicate your family dynamic unless you can come to an understanding of whether you’re repaying them or what they expect from you. There’s no need to go into a deal like this unless you know this family member well, and you can trust each other not to let this ruin your relationship.