Can't Afford to Buy a Home? Do This 1 Thing

It'll get you to that milestone sooner.

Maurie Backman
Maurie Backman
Feb 6, 2019 at 1:22PM
Investment Planning

Homeownership has long been the American Dream, and even though it can be a costly endeavor, there are benefits to going that route. For one thing, you get an opportunity to build equity in a property rather than pay someone else for the roof over your head. You also get to call your own shots. Want a dog? You don't need your landlord's permission. Want to paint the walls red? That's your call.

The idea of homeownership is so appealing that a good 70% of Americans who don't currently own property are eager to buy, according to mortgage company Mr. Cooper. The problem, though, is that 58% of those who want to own lack the funds needed for a down payment.

Let's be clear: The housing market isn't as rigid as it was eight to 10 years ago. These days, you can buy a home without putting down 20% of its purchase price. However, doing so is often a bad idea, because it means signing up for private mortgage insurance. PMI basically gets tacked onto your mortgage payment as a surcharge of sorts, and it can make it harder to keep up with your monthly expenses once you do buy. A better bet is to save up for your down payment, and if cutting back on living costs doesn't do the trick in that regard, here's another option to consider: Get a side hustle.

Man typing on a laptop at a desk.

IMAGE SOURCE: GETTY IMAGES.

Mr. Cooper reports that 75% of aspiring homeowners are willing to get a second job if that's what it takes to sock away their down payment. If you've been struggling to make the leap into homeownership, it's certainly an option worth considering.

Finding the right side gig

When you work full-time, the idea of spending your spare time working can be downright unappealing. But there's a reason side hustles have grown so popular these days -- they don't need to entail work in the conventional sense. Rather than sign up to wait tables, address customer complaints in a call center, or enter data into too many spreadsheets to count, you can find something you enjoy doing and turn it into a money-making opportunity. If you love taking pictures, become a weekend photographer. If you're great at writing, sign up to produce content for blogs you like reading. The less you mind the work at hand, the more motivated you'll be to keep at it.

How much income might that side hustle produce? Last year, the average worker with a second gig earned $686 a month. That means that in the course of a year, you could be sitting on an additional $8,232, which could go a long way toward a home's down payment.

Cutting expenses in your budget is a good way to save up enough money to buy a home. But how much longer do you want to put off that milestone? If you'd rather accelerate the process and purchase your own place sooner, it pays to consider getting a second job, at least temporarily. And who knows? You might get so much satisfaction out of that side hustle that you decide to stick with it on a long-term basis, even once you have your down payment in hand.