Purchasing a new home means coming up with a pretty hefty deposit. Some lenders require as much as twenty percent for them to approve your loan. Anything less than that, and you may have to pay additional mortgage insurance, which bumps up your monthly payments. If you’re lucky, you’ll find a low deposit house and land package. But even then, you still have to worry about your monthly payments. It is best to come up with a deposit because this will reduce your interest rate and the less you will have to pay each month. Here are 7 trusted ways to secure a home deposit:
Factor in Government Assistance
Check if you qualify for government assistance programs in your area. You may be able to get a loan from the government or ask them for assistance so you can buy or build your dream home without blowing your budget. There is so much information available online to help you figure out the requirements and where to apply. In Australia, there’s a First Home New Home Scheme, the First Time Home Owners Grant, and the New Home Grant Scheme, so do your research. The government is always there to help you if you’re smart enough to do the legwork to ask for assistance.
Consider a Side Hustle to Supplement your Income
Going for a second job means earning additional income to increase your budget. After your normal 9 to 5 gig, you can take in side hustles like tutoring, content writing, video editing, babysitting, lawn mowing, and more. With the advent of the internet, these jobs can be done from home at no extra commuting costs for you. Working remotely as a virtual assistant, medical transcription specialist, or writer will help augment your income. You can also capitalize on your hobbies like turning your baking prowess into a cake selling business.
Pay Off Your Credit Card Debt
Your money could be eaten by high interest rate credit cards. Do yourself a favor and pay these all off. You pay a premium when you leave your bills unattended for a long time. Thankfully, you can now find credit card companies that allow you to consolidate all your credit card debt with zero APR or low interest rates. There are many options nowadays, so do your research. You can even ask the credit card company for these low interest rates.
Sell your Unused Belongings
Take an inventory of your things. Chances are, there are many items in your home that are of value but you don’t use often enough. Instead of having them sitting on your shelves gathering dust, sell them while they still have value. From high tech electronic gadgets to expensive bags or jewelry, you could be sitting on a goldmine that has a great potential to fund your deposit. Attempt to sell what you can because one man’s junk is another man’s treasure, so someone will be willing to buy your stuff. Remember, every little cent helps.
Ask for Help from Your Family
In times of great need, our families are always there to ease the burden. If they have additional resources, you can borrow from them for your deposit. Another way is to ask your parents to serve as a guarantor for your loan. You can use their home equity as a security cushion for your own home loan. The bank will be more willing to loan you the money if you have a guarantor. Just remember to never default on your payment because you risk ruining your relationship.
Consider Asking for a Raise
If you have been with your company for a long time and you are confident that you’ve done your part really well, the consider asking for a raise. Lay your case to your boss and highlight all your contributions. There is no shame in asking for this promotion especially if you know you earned it. Speaking up is never a bad thing. Do it politely and with grace. The worst thing that could possibly happen is that they will say no.
Downsize Your Lifestyle
If you’re saving for a hefty home deposit, you will need some bit of time so planning your every move will help. It is time to cut back on spending and downsize your lifestyle. Perhaps you can move to a lower priced rental or get rid of one car and carpool with your partner/ spouse. Rethink that designer coffee and make one at home for half the price. Forego your usual expensive vacation for the time being. Make home cooked meals and brown bag to work. It may take a bit of sacrifice to come up with your deposit but setting your priorities means you are one step closer to owning that dream home.