Getting ready to buy real estate? Then you know that you’re going to have to pool money together to pay for the down payment. But with rent, car payments, food, utilities, saving for the kids’ college tuition, and a little entertainment now and then, saving for that larger down payment certainly seems far easier said than done. But you can do it, it just takes the right knowledge. Whether it’s discipline or thinking outside of the box, this article will help you get one step closing to closing on your next property in Fort Lauderdale.
1. Pay Off Credit Cards
The first, and quickest way to building more money for a down payment in South Florida is paying off credit card bills. It will take some discipline, but it will be integral to building up your funds for a down payment. Considering average interest rates, you could be paying a significant amount in interest; money that could be going towards your property.
2. Try Laddering CDs
After you get a little extra cash in hand, you should put it to work making more money for you. A good place to put at least some of that money is in certificates of deposit (CDs) because they are low risk and generally pretty accessible. The trick, though, is not to put all your money in one large CD, but to maximize the earning power by opening several CDs with different maturity dates (called “laddering”). You could, for example, spread your money across three-month,six-month, and one-year CDs. That way you can make adjustments and shuffle your invested money around to best advantage as savings rates fluctuate, keeping you from being locked into a long-term commitment with all your money when rates are down.
3. Take Advantage of Special Down-Payment Programs
While not strictly a strategy for getting more money for your down payment in Fort Lauderdale, taking advantage of such programs is still a way to get the needed down payment in certain cases. Fannie Mae and Freddie Mac, for example, are government-sponsored agencies that help struggling first-time home buyers come up with down payments. These agencies buy mortgages and then package them as investments, which allows them to waive some or all of the down payment.
4. Dip into Your IRA
The money is already there, and using it toward a down payment could be more profitable in the long run. According to tax law, you can withdraw up to $10,000 from your IRA to buy a first home. And if you’re married and both you and your spouse are first-time home buyers, each of you can make that withdrawal from the respective IRAs for a total of $20,000.
5. Find Overlooked Money
It may sound a little out-there, but this is a way you may be able to find more money for your down payment in Fort Lauderdale. There is a lot of lost, forgotten, and/or overlooked money out there, and some of it may be yours. According to the U.S. Treasury Department, there is approximately $23.8 billion worth of matured but unredeemed savings bonds floating around – bonds that have simply been ignored or forgotten by owners. So check to make sure you’re not one of them, that you don’t have forgotten bonds that are no longer learning any interest. Also, still other people have money sitting in old bank accounts that they’ve forgotten about. The point is you may have money that you don’t remember having.
6. Ask for a Raise
This might not be a suitable option for everyone, but if it is, it can be extremely impactful. There a number of people who go a while without a raise for one simple reason; they haven’t asked. If you are able to, emphasize the value you’ve brought to the company in recent months/years to exhibit why you might have earned an increase in pay. Getting a raise will lead to more potential funds to put towards your down payment on your property in South Florida.
Generating more money for your down payment in Fort Lauderdale is definitely a smart move. But you also have to be smart about using that larger down payment for the house that best fits your needs and is the best for your financial situation. In most cases, only a good agent can help you safely realize those goals.