Down Payment: How Do You Save for One in NYC?
The biggest obstacle for most New Yorkers when it comes to buying a home is saving enough for a down payment. You may have given up on your dream of home ownership because of this, but don’t! Following are a few tips to help you stash cash.
When you think about it — and we know you have — paying the monthly mortgage is actually not the most difficult hurdle New Yorkers face when planning on buying a home. The biggest obstacle for most people in the city is coming up with a down payment. Putting down money on a $150k first home somewhere in the south? Doable. Coming up with a down payment on a $675k first apartment in the Big Apple? What the…?
Gathering together that kind of money can be challenging, but it’s NOT impossible. People do it all the time, and no, it’s not just the people who have unlimited credit with Regional Parental Bank. It’s definitely easier to buy a NYC apartment with family help, but if that’s not an option for you, there are ways that you can rack up extra money quickly.
Pay Yourself First
This is an easy one, and yet few people do it. Whenever you get your paycheck, put a percentage of it away for yourself, no matter how small you think that paycheck is. So if you bring home $2500 every two weeks, try and set aside 10 percent ($250) of it. That may seem like a huge amount, but does it seem a bit more palatable when you realize that’s only $22 per day? That amounts to $500 per month! That can add quite a bit of heft to a down payment fund very quickly.
Accept Gifts (or Government Programs)
If you’re a full-time employee of a company, speak to the benefits department and find out if the company offers any sort of down-payment assistance program for employees. Employee match programs are awesome resources because companies match part or all of the money that employees have set aside for a home deposit. Companies may also offer access to low-interest loans that you can use for things like closing costs or renovations. Check out government or private programs that offer the same types of programs.
Check Out Other Options
Work with real estate agents to find out about lenders and programs like SONYMA that offer products like down-payment assistance and low-cost loans to NYC residents. Agents know about programs that could provide real assistance to people looking for homes in NYC’s high-priced real estate market.
Take a Part-Time Job
Use your skills to make extra money that you can pocket away into your house fund. And yes, you have skills.
- Become a part-time dog walker. New York is FILLED with people who need someone to watch over Rocko and Fido when they can’t. Feed a pooch while feeding your pockets!
- Write articles or blogs for companies. Businesses need to market themselves, and they need writers to make that happen. You could write anything from press releases for theater companies to product descriptions for major retailers.
- Become a part-time worker in the sharing economy. Join Lyft or Uber as a driver or work for Instacart.
Work on Your Credit Score
Folks with higher credit scores get far better interest rates on loans than people with lower scores. They’re often able to put down less as well — a huge boost in New York’s costly market. Work on getting your numbers up.
That may seem impossible in a city like NYC, but it’s not. Carry your lunch to work, host parties at home instead of buying expensive dinners at posh restaurants, etc. Buy and sell on sites like Craigslist and shop flash sale sites like Gilt and Rue La La.
Image Source: Flickr/Philip Brewer