9 Ways to Pull Together the Down Payment for a Home

African American couple opening door to their home.
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Owning a home is the American dream. Nearly everyone yearns for a beautiful home on their own patch of land, complete with a white picket fence.

If a home purchase is in your future, now is the time to start saving for a down payment. Here are nine ways to cobble together the cash you need.

1. Set up a dedicated account

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Get going by setting up a savings account that pays the most interest possible. If you’ll be tempted to divert the money to other needs, set up an account solely for the down payment. Comparison shop for the best savings account rates in our Solutions Center.

2. Put savings on autopilot

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Saving is painless and virtually unnoticeable when you set up an automatic withdrawal with your bank that pulls money monthly, twice monthly or weekly from your checking account.

3. Dedicate windfalls to your goal

New home
Andrey_Popov / Shutterstock.com

Pledge to put every tax refund, gift of cash, purchase refund and work bonus into your down payment account.

4. Stash away every raise

money
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When you earn a raise at work, carry on as if it never happened. Have the difference between your old and new paychecks funneled automatically into your down payment savings.

5. Sell your stuff

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Sell your possessions for cash to fatten your savings account. Money Talks News is full of inspiration and tips about how and where to make the most money selling your things. Here’s where to start:

6. Sell your car

Keys and money
Olha Solodenko / Shutterstock.com

Pump up your savings fast by disposing of assets that have real value, such as a car, boat, motorcycle or expensive sports equipment. Do without or replace the car with a cheap beater.

7. Sell taxable investments

Couple and money
Andrey_Popov / Shutterstock.com

Do you plan to sell investments to raise money for your down payment? If so, sell stocks, bonds, mutual funds and other investments in taxable accounts instead of touching money held in tax-deferred retirement accounts such as IRAs and 401(k)s. Selling investments in tax-deferred accounts carries stiff penalties if you sell before retirement age.

8. Get help from family

Parents and money
Iakov Filimonov / Shutterstock.com

Rules differ by lenders on whether and how much help with your down payment you can get from gifts.

One example: The Federal Housing Administration (FHA) lets borrowers apply gifts from immediate family members toward a down payment. You’ll be required to produce a “gift letter” from the giver, verifying that the money is not actually a loan. You’ll probably also need to show copies of checks or wire transfers so your lender can verify the origin of the gift.

9. Ask your employer for help

Couple in new home
Daniel_Dash / Shutterstock.com

Some employers — including companies, colleges, universities, and state or local governments — have programs to help employees with down payments. Ask the human resources department where you work about possibilities.

When negotiating for a job, you may be able to ask your new employer to include down payment assistance as part of your compensation package — as a signing bonus or relocation assistance.

Are you trying to pull together the down payment for a home? Share your experience with us in the comments below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

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