5 Basic Ways Millennials Find a Down Payment to Buy a Home

Homeownership is on the rise with more and more people opting to buy rather than rent.

At the end of the twentieth-century, homeownership statistics saw a 67% increase.

However, during those years, homeowners also struggled to come up with enough money as a down payment on a house and today the situation is no different.

Even though the general down payment figure is 10%, some banks sometimes ask for 20% before a bond is approved. In this trying economic climate, how is it possible to find that large a sum of money? It might be difficult but not impossible.

Here are 5 tips to help you out:

1 – Save x-amount every month

The best and safest way to build up a sizeable deposit for a home is to save.

No, not by putting cash underneath your bed every month, but by opening a savings account at a bank with a decent interest rate per month. If you are paid monthly and you save 10-20% of your salary every single month, you would have saved a reasonable amount by the end of the year.

Consider the interest that you would earn per month on the compounding figure and you will easily be able to afford the deposit on your dream home.

2 – Sell your stuff

If you are planning on moving, then you should be scrutinizing your belongings and deciding which items should stay and which items should definitely go.

Don’t throw the items away; sell it on second-hand sites, such as Gumtree or OLX. If you are unable to access these websites online, you can always have a garage sale in your own backyard.

You will be surprised at how much people are willing to pay for items that you deem worthless. So dust off the things you’ve been storing in the garage and get selling!

3 – Get a better paying job

If having two jobs is really not your cup of tea, then you should consider reflecting on your current job and your current salary. Are you being paid enough? Compare it to other salaries in your position.

If you feel like you can do better, then get a job where the pay is higher. This way you will be able to save the extra money you earn per month and you will be one step closer in achieving your goal to buy your dream home!

4 – Take a second job

Many millennials already have second jobs in order to keep their heads above water, but if you are only working one job, you might want to consider taking up a second.

This does not have to be labor-intensive; if you have a special skillset you can freelance online, or even teach English as an international language via Skype.

Alternatively, you can do seasonal jobs such as lending a hand at a mall during Christmas when they are at their busiest, or get a job as a waiter at a busy restaurant in the evenings over weekends. Sure, it is hard work but it won’t be forever.

5 – Borrow from your parents

If you are at the age where you are considering buying a home, the chances are that your parents already paid off their own mortgage.

It is not uncommon to ask your parents for a loan in order to make a down payment and certain tax laws might even allow such a loan to take place without tax consequences.

If your parents are unable to help out, you can also consider applying for an unsecured loan and paying the installments at lower rates.