HeSaidSheSaidPH.com | 5 Tips to Help You Save for a First House Deposit | Buying your first home is a huge step in every person’s life. However, it can be difficult to accomplish. Not only is this a major asset whose value can often be measured in hundreds of thousands of dollars, but it’s also quite stressful from the logistical standpoint. Sure, you can get a house loan to finance the majority of the purchase but what about the house deposit. Where do you get the money you need to place a down payment for your first real estate? Here are several tips to help you save this kind of money.
- Starting a savings account
The first idea that a lot of people resort to is starting a savings account. From that point on, they dedicate a certain percentage of their funds in order to deposit it into a savings account. The problem with this method lies in the fact that it takes time. For instance, a 52-weeks saving plan will save you about $1,378 in a year, if you start with $1 and raise the amount by $1 every week. The thing is that this still takes a full year. Nonetheless, for all those who have the time and dedication, this is definitely the best of ideas.
- Selling an asset
In order to raise these funds, some people are known to sell an asset that they own. For instance, some people buy a property that’s closer to their place of work, which is why they can now commute by foot or cycle to work. This frees them up to sell a vehicle that they own. Others sell the vehicle and buy a cheaper model, while there are some who sell the vehicle as a temporary solution, only to buy it back later on. While this is definitely not an ideal solution, it’s one more option to consider.
- Borrowing from family and friends
If your friends and relatives have this kind of money lying around, you could try borrowing the deposit money from them. The benefits of this method are that you get flexible credit payments (whatever you agree upon) and the fact that you don’t have to pay the interest rates. The downside, however, lies in the fact that some people abuse this advantage. If you do decide to go for this form of lending, you should take it as seriously as possible. Deteriorating decades of good personal relationships for short-term financial help is never worth it.
- Invest in cryptocurrency
When planning ahead, one of the things you can do is make an investment that will pay off in a certain period of time. Even if this growth is not exponential or sizable, just the fact that you’ve invested the money will ensure that you won’t be able to spend it before you need to make the down payment. One such idea is to invest in cryptocurrency. You don’t have to buy cryptocurrency, you can also simply invest in the best bitcoin mining hardware, which will ensure that you have a steady return on your investment.
- Finding a side project
Working on a side project is a great idea, especially if you plan to save money for a first house deposit. Why? Well, because it has a limited duration of the project. Think about it, with your current job, you’re already making it, which means that you can dedicate the full amount that you earn from this side project towards saving for a house deposit. Also, because you need to save a specific amount, you can quit the side project as soon as you reach this financial goal. In this day and age, fortunately, there are so many amazing side hustle ideas for you to use.
Of course, there are numerous other options that you can consider. Non-bank mortgages, hard money loans and FHA loans are just some of them. The reason why we’ve chosen the above-listed five is due to the fact that they’re convenient and universally available even for people without collateral or stellar credit score.