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Published On: Fri, Sep 26th, 2014

How to Save Up a Down Payment Fast

Whether you’ve just grown weary of renting or you’re facing an unexpected addition to the family, deciding to buy real estate is a huge financial move. While there are still loans available for those who don’t have a down payment saved, the terms can be unattractive. If you need to save up a down payment for a house in a hurry, here are some tips to get you started.

Cut All Nonessential Bills

If you only have a few months to get your funds together, sacrifices will have to be made. Cut down or eliminate your cable package and drop your cellphone plan to the bare bones. Get rid of Netflix, Hulu, the gym membership and the land line phone, if you still have one. Check your credit card and bank statements for any recurring charges you can cancel. Funnel all of the extra income into a savings account.

photo/Revisorweb

photo/Revisorweb

Check Your Tax Withholding

Plenty of people claim zero on their tax form at work so that their tax return the next spring is sizable. While this can work to your advantage under normal circumstances, it’s not a good idea for when you’re in a down payment crunch. Check with your human resources department and make sure you are taking the maximum of allowed deductions. If you were not claiming your full deductions before, doing so now can bump up your paychecks and get you one step closer to that gorgeous property you have your eye on in Bonita Glen.

Boost Your Income

If your current paycheck isn’t enough to meet your current needs and help you make your real estate purchase, you’ll need to make more money. Consider working overtime or taking on a second job. If you need flexibility, there are freelance opportunities online that allow you to make some extra cash at your own pace. You can write articles, sell artwork or even sign up to take incoming phone calls at home. Put all of your extra earnings away for your real estate purchase.

Tap Your Retirement

This should be your last resort, but if you still can’t save up enough to get your real estate deal handled in a reasonable time frame, you may need to withdraw some of your retirement savings. Many 401(k) plans allow you to take out loans for the purchase of a primary residence and pay it back to yourself over time. You can also withdraw from a Roth IRA at any time, and there is usually no penalty for doing so. If you have no other options, carefully tapping your retirement to fund a real estate purchase can be an astute move.

If you need to buy a house quickly due to changing life circumstances, trying to cobble together a down payment can be a challenge. Using these strategies, you can increase you income, lower your monthly output and have a nice chunk saved up rather quickly. If all else fails, you can also use retirement money to give you the final little push you need to get into a house.

Guest post: Lolita Di

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