saving for a down payment

Recent changes to FHA lending rules may require some homebuyers to have a bigger down payment in order to close on a mortgage. While putting aside some extra funds may seem daunting, there are different ways you can do it.

Spend Less

It may seem obvious. But many of us underestimate how much money we really spend on a daily basis. Coffee runs, eating out, and trips to the mall add up. Did you know if you cut $28 a day out of your daily expenditures you'd save more than $10,000 in a year? 

The first step would be keeping a log of your daily expenses to see how you're actually spending your money. From there, create a budget - determining needs vs. wants.

Money expert Dave Ramsey suggests concentrating on the Four Walls—food, shelter and utilities, basic clothing, and transportation. Once your true necessities are taken care of, you can fill in the rest of the categories in your budget.

"Budgeting means you’re spending with purpose before the month begins. But many people view a budget as a straitjacket that will keep them from doing what they want," Ramsey's website said. "But that couldn’t be farther from the truth! A budget doesn’t limit your freedom, it gives you freedom! It’s really all about being intentional with where your money goes."

While making your budget, Kazantzis Real Estate Agent Val MacNeil suggests canceling monthly subscriptions like Netflix or Birchbox.  

"You may also want to unsubscribe from emails from retailers, like clothing stores, that tempt you to buy their goods with sales," MacNeil added.

Get a Side Hustle

There are countless ways to earn some extra money outside of our full-time gigs. We all have talents. Start brainstorming how you could use yours to make some extra cash. Are you a good writer? You may consider freelance writing or copy editing. Cook? Double or triple the meals you're already preparing for your family and package them up. Animal lover? Become a dog sitter for people who don't want to put their pooch in a kennel. Just Google "side hustle ideas" and you'll see the possibilities are endless.

Even if you can't think of ways to use your talents to make money, there are also many tasks anyone can do.

  • Mow lawns in the spring and summer and shovel driveways in the winter
  • Drive for a ride-sharing service like Uber or Lyft
  • Selling goods like clothes, designer handbags, and small appliances on sites like eBay, Poshmark or Facebook Marketplace
  • Donate plasma. Some donation centers like CSL Plasma pay hundreds of dollars a month for just two to three hours a week
  • Deliver food for sites like GrubHub or DoorDash

Whatever you choose to do to make extra cash, just make sure you don't spend it. You may want to open a separate savings account dedicated to your down payment. You just may be surprised how quickly it adds up!

Down Payment Alternative

While traditional FHA products will likely require a downpayment, Kazantzis Real Estate Owner Andrea Kazantzis said if you qualify, you could consider a rural development loan. 

The USDA loans are low-interest mortgages with zero down payments designed for low-income Americans who don't have good enough credit to qualify for traditional mortgages. You must use a USDA loan to buy a home in a designated area that covers several rural and suburban locations.

"Whatever your needs, whether it's a traditional mortgage or a Rural Development Loan, the agents at Kazantzis Real Estate can guide you through the process and help you realize your dream of homeownership," Kazantzis said.