Yet 60% couples would give it all up if it meant they could afford a house down payment, according to a March survey from ERA Real Estate. What’s more, almost 50% of women said they’d sacrifice a big engagement ring, too, if it meant they could confidently pony up the cash for a new home.
What’s behind their willingness to sacrifice? ERA suggests it’s the bonding experience. “Our findings suggest that homeownership is an increasingly important part of a relationship, especially among the first-time homebuyer generation who are investing in their future,” Charlie Young, president and C.E.O. of ERA Real Estate, said in a press release.
And it’s not just couples willing to work for their down-payment money. In a Trulia survey, more than a third of Millennials said they’d take on a second job in order to pad their new-home savings.
How else are first-time homebuyers swinging their down payments? Here are three ways they’re finding the money—plus pitfalls to beware, courtesy of Marketwatch.
1. Scaling back on non-essentials. Karen Carlson, director of education and creative programs for nonprofit InCharge Education Foundation, says some of the best ways to hit your down payment savings goals is to trade in your car for cheaper payments, cut cable, and find—and sell—items you don’t use.
Easy enough, right? Just one problem: The Trulia survey found that Millennials aren’t particularly interested in following that advice. 65% said they’d never give up their car in order to fund their down payment account, and another 13% said scaling back on dining out was a bridge too far.
2. Ask family for a gift or loan. Half of Millennials would consider asking their parents or grandparents for help with a down payment, which is a great resource—if you can get it.
But don’t forget to create a paper trail, warns Phyllis Caldwell, director for the Center of Homeownership in Winston-Salem, N.C. (A cashier’s check should do the trick.) Your mortgage lender may inquire where the money came from.
3. Borrowing from a 401(k). About 15% of buyers take loans from their retirement funds—but this really isn’t your best course of action. Not only are there limits to how much you can take out, but if you don’t pay it back in the allotted amount of time, you’ll be subject to additional penalties and taxes. Plus, you’ll be missing out on the magic of compound interest.