Buying property is the biggest purchase that most people make. Although it is very satisfying and rewarding, it's also costly to finance. Many people are intimidated by the financial burden required to purchase property. Fortunately, there are several ways to can obtain the funds necessary to reduce the impact of this purchase on your personal finances.
- Skill level:
- Moderately Challenging
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Save as much money as you can. This is an often-overlooked method of raising money and one of the easiest. Cut out all unnecessary expenses for a certain period and place the money you save in an account reserved strictly for your property purchase.
Sell all assets that are not essential to maintaining your standard of living. Get rid of that extra car, furniture in storage and electronic equipment that don't use. You can have a garage sale, sell the items online or post a classified ad to attract buyers.
Access funds from your 401k. Many retirement plans will let you take out a loan for the purchase of property against your account balance. This is a good option because the interest charged on these loans is low compared to bank loans.
Borrow from friends and family. If you have relatives or friends who are financially able and willing to lend you money, exercise that option. You can get a much lower interest rate from your loved ones than from a financial institution.
Qualify for government grants or incentives. There are many government programs tailored to property purchasers. Grants are available for first-time buyers, minority buyers, female buyers and buyers purchasing property in specific locations.
Get a second or third job and put all the income from that employment into your account for the property purchase.
Request financial help from your church, temple or other institution. Many religious entities have programs that help congregants purchase property or provide access to resources that can help.
Apply for a loan. Banks and credit unions have numerous options available for financing the purchase of property. Research as many of these financial institutions as possible to make the best informed decision. Getting a favourable loan package will positively impact your finances for years to come.
Tips and warnings
- Always review loan contracts before signing them to ensure the terms are favourable.
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