How to Raise a Down Payment

Raise the money you need for a down payment.

Raising a down payment, whether it's for your first home or a new car, can be difficult, especially if you're living from paycheck to paycheck and have little money in your savings account. But it's not impossible to raise the money you need for a down payment if you enlist help and employ creative means to cut expenses and to earn more money.

Instructions

1. Ask family members or close friends if they can extend a personal loan to you. Although you may be reluctant to let others know about your financial straits, this is one of the fastest ways to raise down payment money.

2. Eliminate unnecessary expenses from your budget. If you're a smoker or addicted to $4 lattes, kick the habit. Give up going to the movies and eating in expensive restaurants regularly. If you have the top cable TV or dish package, request a cheaper package. These may seem like little things, but you'll be surprised how quickly the savings can add up.

3. Pick up odd jobs. Consider what you're good at, then find people who need help in that area. For instance, if you own a ride-along mower and don't mind being out under the sun, ask neighbors if you can mow their lawns. Or if you're a pet person, offer to pet sit for friends and family members, or to walk dogs---for a fee.

4. Hold a garage sale. Sell things you no longer need or want at a weekend garage sale. Part with larger, more expensive items like a bicycle and treadmill if you don't use them.

5. Take out cash from a credit card or equity line of credit. Credit cards typically have higher interest rates, so take a cash advance from a credit card only in an emergency. Needing a replacement car to get to and from work may qualify as an emergency. Needing money for a down payment on a home may not, because there will always be homes for sale. Taking cash from an equity line of credit on your home is another option, but again, use it only as a last-ditch option because of the interest payments.

6. Tap into your retirement account if you're trying to raise money for a down payment on a home. Like your retirement account, a home is a long-term investment. Using retirement account money to buy a home is the equivalent of moving money from one long-term investment into another. On the other hand, taking money from a retirement account for a down payment on a car will hurt you financially in the long term more than it will help in the short term.

References

• Nolo: Your Down Payment: Where Will It Come From?
• Beneficial: Raising A Down Payment For Your Home