We use cookies to enhance your browsing experience and deliver our services. By continuing to visit this site, you agree to our use of cookies.More info
Juan Real Estate GroupJuan Real Estate Group
Call Us:

(978) 581.0801

Message Us:

[email protected]

  • Meet The Team
  • Testimonials
  • Schedule a Call
  • Read Our Blog
  • Seller Experience
  • Free Home Valuation
  • Our Marketing Strategy
  • Buyer Experience
  • Search for Homes
    • Call Us:

      (978) 581.0801

    • Message Us:

      [email protected]

    Featured Image

    5 Secret Sources of Down Payment Money

    5 Secret Sources of Down Payment Money Whether you are planning to put down a full 20 percent or pulling together the cash...

    • Juan Murray
    • March 1st, 2018
    • 6 min read

    5 Secret Sources of Down Payment Money

    Whether you are planning to put down a full 20 percent or pulling together the cash for a 3.5 percent down payment for an FHA loan, your down payment might be the biggest single cash expenditure you ever make. Some scrimp and save for years, while others can ready the cash with less difficulty, but no buyer in the history of home buying has ever said they have too much down payment money.

    Here's an insider secret: many buyers have a treasure trove of down payment resources at their disposal, hidden in plain sight. Here's a map of this hidden treasure – a handful of frequently-overlooked sources of down payment funds.

     

    1. Your budget's biggest line items. 

    Home buying is one of those push-meet-shove-type situations. If you're serious about coming up with your down payment funds, sit down and backtrack over your monthly budget or your last month's checking account statements. Isolate your top 10 budgetary line items and do an internal gut check on whether there is anything on this list that you can slash or eliminate.

    If you spend $5 a workday on a bagel and coffee at breakfast and another $15 on your takeout lunch, that's $400 per month – almost $5000 a year! – you can save by simply bringing these things from home (not to mention the health and other benefits you'll gain). And those numbers are not inflated if you work in a big city. Nor is the $100/month cable bill, the $20 yoga class, the $2,000 vacation or the premium pricing you might pay for cell service.

    Redirecting the dollars you would normally spend for some of these big-ticket items back into your down payment savings account is like pressing fast forward on your home buying timeline.

    2. Your stuff. 

    When you need to save money, there are really only two levers you can pull: you can spend less, or you can make more. Selling stuff you already own and don't actually use is a relatively painless way to make more money to go toward your down payment. If you're really serious about home buying, put everything on the table.

    Things buyers-to-be often sell (usually online) include:

    • RVs, cars, and motorcycles
    • designer clothes, costumes, shoes, and handbags
    • underutilized hobby-related gear (bikes, boats, and snowboards)
    • furniture and antiques
    • electronics, books, and CDs (think: TVs, computers, old smartphones, etc.)

    Don't underestimate the amount of cash you can bring in from the things you already own.

     

    3. Your skills and time.

    One way to make more money is to sell off the stuff you have lying around the other is to get to work! Spend your off-time, your evenings and weekends leveraging your professional skills or personal hobbies to bring in some extra cash.

    Once you get serious about coming up with your down payment cash and decide to be creative about where to find that money, using your skills and your time creatively is a power-packed way to open the financial floodgates.

    Consider starting out with a simple email to your circle of acquaintances outlining your skills and what kind of work you'd like to pick up. You can also list your potential services on a site like TaskRabbit. If you are crafty you might let your new felting hobby stock the virtual shelves of your shop on Etsy. Even if you aren't "creative" think creatively about what you might do to earn a little extra cash. One acquaintance of mine has earned thousands of dollars dog sitting while she works at home. You'll be surprised by how much you can earn hawking wares on the side or with small business projects, like research, bookkeeping or office organizing projects.

     

    4. Your Parents, Family, and Friends. 

    Many home buyers get by with a little help from their friends (and relatives). Most mortgage programs will allow for some portion of your down payment to come in the form of 'gift money,' which is exactly what it sounds like: money someone gives you to help you buy a home.

    The best case scenario is to have some idea of what sort of gift money you can count on as far in advance as possible, as it will impact your own savings targets and your lender's documentation requirements. If you have a parent, sibling or auntie who has mentioned their interest in giving you this sort of gift it is important to bring the subject up, express your gratitude and let them know that you're planning to buy soon. You'll want to have a detailed conversation about logistics and go over everything from timelines to tax obligations.

    Check in with your mortgage pro about how much of your down payment needs you can satisfy with gift money – guidelines vary widely based on how much of your own cash you have to put down and what loan programs you're applying for. Lenders almost always require that gift money be contributed along with a gift letter that states that the giver is a relative and that the money is a gift, not a loan. The lender may also require seeing a bank account statement from the giver showing that the money was theirs to give – just to be sure they didn't go out and get some sort of loan that they expect you to help them repay.

     

    5. Your Assets.

    Some retirement accounts allow you to borrow against or pull out funds, penalty-free, to apply them toward your down payment on a home. Obviously, your specific circumstances will determine if it is advisable for you to tap into your 401K or IRA and plug that cash into a house. For some buyers, it may make sense to get your down payment up to 20% by borrowing a few thousand dollars from yourself!

    If getting your down payment to the 20 percent mark by borrowing from your 401K gets your mortgage interest rate down and allows you to repay that cash to your own retirement account (vs. to your mortgage lender) with interest, you and your financial advisor might agree that this move is the right move for you. Or not – this is a highly personal decision that must be made strategically, but some homebuyers should at least explore whether their retirement accounts are a sensible source of some portion of their down payment funds.

    Selling Your Home? 

    Get your home's value - our custom reports include accurate and up to date information.

    Get Home Value

    Author Photo
    About the author

    Juan Murray

    (617) 721-0961
    • facebook
    • instagram
    • linkedin
    Juan got his start in the residential real estate market in 1994 and has never looked back. His mission is to provide excellence to his clients, and he is always looking for ways to improve the real estate experience for his clients and colleagues in the industry. Early in his real estate career, he worked as the Housing Rehabilitation Director for a national non-profit organization, Neighborhood Assistance Corporation of America (NACA). His goal was to gain more knowledge of the construction and renovation of existing homes in conjunction with working with 1st-time buyers. He effectively managed over 25 residential construction project managers on the East & West coasts while implementing procedures to improve communication between contractors, property owners, and banking representatives. He also developed resources, designed processes, and organized all aspects of real estate property acquisition and renovation. Juan completed a home inspector licensing course on his way to becoming a licensed home inspector. But after completing 30 inspections as an apprentice observer, after crawling under numerous porches and “crawl spaces,” he decided it wasn’t his cup of tea. Juan has always had a sharp eye for market trends and an innate understanding of what his clients need. That’s why, as a top real estate agent in Boston, he is constantly ahead of the curve, anticipating changes in the market and helping his clients manage their real estate goals. His keen intellect, quick wit, and tireless work ethic make him an invaluable partner for anyone looking to buy or sell property in the Boston area (or via his referral partners worldwide). Although Real Estate is a large part of his life, it is not the only part. He loves hanging out with family and friends, being in the kitchen, enjoying great food, anything Apple or Cole Haan, gadgets, great cigars, F1, motorcycles, photography, and traveling (to name a few). He lives with integrity and tries not to take life too seriously.

    Similar posts like this

    Stuck Between Moving and Staying? These 3 Questions Can Help You Decide

    Feeling torn about moving or staying put? These 3 questions can help you get clear on what matters most—beyond just your...
    Read more

    Summer Home Shopping in Boston? Here’s How to Beat the Competition Without Overpaying

    Buying a home this summer in Boston? Here's how to write a competitive offer, understand seller motivation, and know whe...
    Read more

    Is Your Listing Photoshoot-Ready? 7 Overlooked Details That Matter in Boston

    Most buyers see your home online before they ever step inside. Use these 7 often-missed tips to make sure your listing p...
    Read more
    Juan Real Estate Group

    Juan Real Estate Group

    769 Centre St, Suite 209, Jamaica Plain, MA 02130

    769 Centre St, Suite 209, Jamaica Plain, MA 02130

    Call Us:

    (978) 581.0801

    Message Us:

    [email protected]

    Footer Links

    • Meet the Team
    • Testimonials
    • Schedule a Call
    • Read Our Blog
    • Sellers
    • Get Your Home's Value
    • Search for Homes
    • Buyers
    Privacy Policy

    Juan Real Estate Group © 2025

    Powered by