- Reduce your rent. For many young workers, the rent bill is their biggest monthly expense and reducing that can be one of the main ways to substantially increase savings. Some people may save by moving back in with mom and dad, if that’s an option, says Joseph Kirchner, senior economist for realtor.com, a real estate listing website. For other people, it may mean getting roommates, he adds.
- Sell your car. Getting rid of your car can reduce your monthly bills by hundreds of dollars a month once gas, insurance costs and loan payments are factored in, Kirchner says. Of course, this may not be feasible if you live somewhere with limited public transportation. But couples with two cars may consider downsizing to one car if they can pull it off.
- Get financial help. You may qualify for down payment assistance through your employer or your state, says Tracey Shell, a spokeswoman for DownPaymentResource.com, a site that tracks homeownership programs. For example, some buyers will qualify for grants if they agree to live in the home for a set amount of time, such as five years. Other buyers may be able to receive low-cost loans that they can use for the down payment.
- Make more money. Whether its asking for a raise or taking on a side job, increasing your pay can be an obvious way to find more cash to save.
- Know the ins and outs of different mortgages. There are benefits to providing a 20 percent down payment, but you don’t always need to provide that much money down when buying a home, Shell says. “In a lot of markets that could mean that you’re not going to own a home for 15 years,” she says. For some buyers, it may make more sense to buy a home using a loan that is secured by the Federal Housing Administration. Those buyers can provide down payments of 3.5 percent, but would need to pay mortgage insurance, which could increase the overall costs of the home.
May 16, 2017 at 3:36 PM EDT