- Higher home prices are forcing buyers to come up with larger down payments.
- If your regular paycheck isn't helping you save quickly enough for a home, a second job could be your ticket to being able to buy sooner.
- A side hustle could also help you save money for home maintenance costs.
It's certainly an option worth considering.
As a general rule, it's a good idea to make a 20% down payment when buying a home. Doing so can help you avoid private mortgage insurance, a costly premium that gets added to your ongoing mortgage costs if you buy with a conventional loan.
That said, mortgage lenders will commonly accept a down payment on a home that's lower than 20%. You might, for example, be able to get away with a 10% down payment and just have higher ongoing mortgage payments as a result.
But these days, making even a 10% down payment is no guarantee of home-buying success. Home prices are still up on a national level. Plus, mortgage rates are at their highest point in several decades. That's created a major affordability crunch for buyers.
If you're finding that your regular paycheck isn't enough to help you sock away down payment funds at the pace you're hoping for, then it could be time to take on a second job and use your earnings for home-buying purposes. If you go that route, you won't be alone.
In a recent HomeLight survey, 19% of respondents said they got a second job in order to make a home purchase possible. So it's an option worth considering given that home prices are still high, and that mortgage rates are unlikely to drop significantly in the near term.
The upside of a second job
The idea of working a side hustle may seem unappealing at first. After all, it's your downtime you'll be giving up, and that's not an easy thing.
But if you're serious about buying a home, a second job could make that possible in a shorter time frame. And the sooner you become a homeowner, the sooner you can start building equity in a property of your own.
Plus, you may be in a situation where your landlord leaves much to be desired on the customer service front. That alone is a good reason to try to speed up the home-buying process.
What’s more, once you get used to a second job, you may find that it's easy to keep at it. And that could come in very handy once you own a home and have to manage the various expenses that come with it.
Homeowners are commonly caught off-guard when it comes to things like repairs. And even maintenance can cost more than anticipated. So all told, a side hustle could make it possible to not only afford a home sooner, but manage the costs of ownership with less stress.
What side hustle is right for you?
The side hustle you take on should hinge on factors like your schedule and talents. If you have the ability to design and update websites, that's a great gig you can generally do from home, and at hours that are convenient for you. But you'll need a specific skill set to take on that sort of side hustle.
On the other hand, there are plenty of side jobs out there that let you set your own hours, even if you can't do them from home. Driving for a ride-hailing service, for example, gives you that freedom. And the only skill you need is one you probably already have -- the ability to operate a vehicle.
All told, side hustles offer a lot of upside. And getting one could make it possible to become a homeowner sooner rather than later. It's worth looking into different gigs and seeing which one is a good fit for you.
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