Home Prices Are Soaring. 4 Ways to Boost Your Down Payment Funds

Here's how to scrounge up the extra money you need for a home.

Home prices are through the roof, and they have been for well over a year. That's been a glaring point of frustration for buyers, especially lately, in light of rising mortgage rates.

Generally speaking, it's a good idea to put 20% down at closing on a home to avoid private mortgage insurance (PMI). PMI is an added premium that gets tacked onto your mortgage when you don't make a 20% down payment on a conventional home loan. 

But given how high home prices are these days, coming up with 20% is easier said than done. Plus, even if a 20% down payment is out of reach and you're aiming for 10% down, that's still a lot of money to come up in light of today's home prices. If you're lacking the funds needed to move forward with a home purchase, here are four options for getting your hands on more cash.

1. Get a side hustle

The process of looking for a home can feel like a full-time job. And so the idea of taking on a second job simultaneously may seem daunting. But if you're willing and able to put in the time, a side hustle could be your ticket to more down payment funds. After all, the earnings you collect from that side gig won't constitute money you count on to pay your bills. And so you should be able to take all of your bonus income, minus what you owe the IRS in taxes, and use it for a down payment.

2. Stop driving if you can get by without a car

Some people live in places where a car is an absolute necessity. But if that's not the situation you're in, you may be able to manage without a car for a period of time. And if so, unloading yours and banking your savings for a number of months could get you closer to your down payment goal, especially when you account for savings on things like maintenance and car insurance.

3. Skip the vacation

You may be eager to take a vacation this year. And to be clear, when you work hard all year round, you deserve a getaway. But if you're trying to come up with a down payment on a home, this may be the year to skip the vacation and take a staycation instead. Doing so could free up several thousand dollars, and that's money that could give you more leeway when it comes to purchasing a home.

4. Sell things you no longer need

Selling a couple of unused kitchen gadgets or a single purse may not do much to help you complete your home down payment. But if you're willing to really take inventory and spend the time to advertise the items you have on offer through various outlets (think a combination of social media, yard sales, and consignment shops), you might end up with a few thousand dollars you didn't have before.

Many would-be buyers are facing challenges due to soaring home prices. If you're looking to make a solid down payment, use these tips to snag extra funds -- and get one step closer to being able to purchase a place of your own.