7 Ways to Find Hidden Cash for a Down Payment on Your Home

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For many people, 2013 brought new meaning to the words “New Year’s resolution”. And with the housing market picking up, great deals out there, fantastic interest rates and the overall ripe time to buy – a lot of folks are resolving to buy a new home this year.

But the purchase doesn’t come without at least some money down. Depending on the loan product you choose, you would have to put anywhere from 3.5% down to as much as you want – with some government programs allowing you to buy a home with NO money down.

Here are seven hidden sources of cash that you can tap into so you can sock away that home down payment fund and get into the home of your dreams!

Unnecessary Monthly Recurring Expenses
This is an easy one. Just list your month’s top expenses and then see what you can eliminate. You’ll be surprised how much money is lurking there, just waiting to be saved toward a new home. Things like your daily cup of latte, overuse of your vehicle and therefore lots of gas expenses, and other minor luxuries that add up quickly. Bottom line: Isolate your top ten expenditures and do an internal audit on whether there is anything on this list that you can slash or eliminate.

Bad Habits That Cost You Your Health AND a Hole In Your Pocket
This is a no-brainer. Smoking, drinking, gambling, impulse shopping and anything else that involves wasteful spending are all good sources of hidden cash. If you overdo the soda pop, cut it down. If eating out is a passion, quell it for now and start saving for your new place. You will be surprised how fast you can save a thousand dollars by just cutting out a few of these bad habits.

Stuff You Have That You Really Don’t Need
Believe it or not, most of us have more stuff than we ever really need. All you have to do is go through it, decide what you are willing to sell and then sell it! Things you can sell are second cars, clothes & shoes, bicycles, furniture, antiques, music collections and more. At the end of the day, you will end up with more cash AND more space and when you finally get the home of your dreams – you’ll have LESS packing to contend with.

Doing the Things You’re Good at Doing
If you have a special skill that people would be willing to spend money on, why not work on it and save some money doing it. Whether this is fixing cars, sewing, teaching music lessons – or whatever. If you do something that people are in the market for, all you have to do is advertise it and start saving. It’s an added bonus if you love doing what you are good at.

Tap Into Your Loved Ones
If you have people in your circle that are willing to help you – don’t hesitate to ask! There are some loan products that allow you to use gift funds toward the purchase of a home. Other scenarios might be when an older person in your family is planning their estate, or if your graduation or wedding is rolling around and lots of people will be gifting you with something. These are great ways to save money for a home. And people that love you will want to help with it instead of smaller gifts that may not have as much impact on your future.

Check With Your Boss – Companies Help With Housing Sometimes
A lot of employees don’t realize that their companies offer housing assistance and better yet, mortgage assistance for those that meet certain requirements. It doesn’t hurt to ask and chances are you might be able to secure some extra funds toward your down payment. When relocating for work, companies will usually cover a large chunk of the expenses involved whether moving expenses or down payment assistance.

Your Local Municipality, State or Federal Programs
Just spend a few minutes on Google and you will find a TON of hits for down payment assistance. Many states offer assistance and most people are aware of these programs. But what a lot of homebuyers don’t realize is that cities and counties also have similar programs designed to stimulate the local economy and help qualified citizens out. 
Your best resource for these and other ideas is your real estate agent. They will advise you with tips that could change your entire buying process and impact your timeline too. Usually they are aware of any programs available to local residents.

The Real Estate Market Offers Lots of Opportunity for Solid Investments in 2013

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If you think back to just a few years ago, the devastating effects of our stock market crash seized many people’s financial portfolio with grappling waves of aftershocks. But now  real estate investments are making a comeback. It was hardly a year ago that billionaire investor Warren Buffett spoke on how he’d invest in single-family homes on a large scale if it were practical.

But for the average investor, investing in a single-family home is a very practical venture to get into.

Consider this example:
On a $150,000 house where if you were to put down 30% leaving a loan of about $100 ,000 or so you would end up with a monthly payment of around $750, give or take some. This is assuming an interest rate of 5.25% to be generous but with today’s low interest rates in the low to mid 3 percent range, the monthly payment would be even less. Depending on a number of factors such as location, amenities, style of home and area rental market, you can expect to yield anywhere from $900 to $1,200 each month in rental income.

Clearly, the ROI is strong and as you are able to ride the rate on inflation you will enjoy a sizable return month after month after month. Assuming your down payment is about 30%, the profit when you decide to sell the property will also be worth your while.
So as you look to 2013 and sit down to make financial decisions that will impact the rest of your life – consider investing in a rental home. The market is ripe with low interest rates, low prices and a number of good properties available for sale. Contact me today to get started on your customized property search.