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Buying a house is a big deal, and before you sign on the dotted line, there are so many things to consider first. One of them is the down payment you will need, which is the amount of cash or equity you put down at closing. 

In the Sacramento real estate market, the biggest decision you’ll face is whether or not to pay cash or finance your purchase if that’s an option. Both methods have pros and cons, but if you can put down at the least 20 percent, you’ll likely get a lower interest rate if financing. 

On the other hand, you’ll have to come up with a larger down payment. A down payment is usually between three percent and 20 percent, and the higher the percentage, the lower the interest rate. 

If you don’t have enough saved, you might want to look into other options. For example, you could take out a bank or credit union loan. Or, you could borrow against your 401(k) plan.

In this article, we’ll explore creative ways you can get the money needed for your down payment on your dream home.

7 Creative Ways to Come Up With a Down Payment

There are various ways to get the money needed for your down payment. Below are the top nine creative ways to get the money needed so you can score a lower interest rate on your next mortgage.

#1 Sell Something You Already Own

If you’ve been meaning to sell that old couch or other furniture in the garage, now may be the time to do it. It can give you the extra funds you’re looking for. But first, make sure the sofa or other items are clean and free of dust, dirt, or stains.

You can use eBay, social media sites, or similar services to sell your items online. Or, if you know someone who wants to buy it, ask around. Just make sure you’re using the right keywords so interested buyers find you quicker.

#2 Take Out a Personal Loan

Another option for coming up with some extra cash is to borrow money. It may be either secured by assets (a lien on a car or house), unsecured (no collateral involved), or both. Be sure to check all requirements for such loans. 

In many cases, people ask family members to borrow the amount needed for the down payment and then agree upon a repayment plan. Make certain you can handle both your new mortgage and the loan you got for the down payment in either situation.  

#3 Cutting Back on Social Life

You’ve probably heard this advice before— but seriously consider cutting back on social life for a few months so that you can save enough money to purchase your dream home. You’d be surprised how much money people spend monthly on eating out and entertainment.  

At first, it can be challenging to adjust to a new lifestyle, but it can go a long way in boosting your finances in the end. In fact, some people see such savings that they adapt this habit into their new lifestyle of homeownership. 

#4 Use a Combination of Cash and Debt Financing

It may sound counterproductive, but borrowing money from a credit card with a zero or low-interest rate can be an easy solution for getting the funds needed for your down payment. 

If you’re among those considering borrowing money, you might be a prime candidate for using a combination of cash and credit. Combining these financing options allows you to pay the down payment in full with little effort while using debt to make mortgage payments.

Therefore, borrowers with higher incomes tend to borrow based on their ability to repay, even though interest rates on credit cards and other forms of consumer debt remain high.

As long as your debts don’t exceed your assets, taking advantage of a zero percent APR card could give you some extra purchasing power. 

#5 Downsize Your Lifestyle

Before buying a home, you’ll need a plan to determine whether your current lifestyle would support your new mortgage payment. If you have a lot of extra stuff lying around at your current address, moving it into storage or donating it could save you hundreds every month.

In a competitive setting like the Sacramento real estate market, the main reason why people sell their homes before purchasing another one is that they realize they don’t need a certain amount of square footage anymore. 

Remember, the smaller the home, the less stuff you need to furnish it. So go ahead, start living simpler and see how much money you can save. 

#6 Get a Side Hustle

For those who think they can’t afford to buy a home, the best way to secure an affordable mortgage is to earn more income. However, working part-time isn’t enough to cover hefty down payments and monthly expenses, and that’s where a side hustle comes into play. 

By combining multiple sources of income, you can save time, set aside money for a down payment, and still enjoy life. Just make sure you love what you choose to do, or it may feel overwhelming putting in all those extra hours. 

#7 Take Advantage of 401(k) Loans

Another option to consider is using your 401(k), which many employers offer. Instead of contributing to your account, the employer sends the money directly to a lender, usually within 48 hours. The borrowed money then becomes an asset in your investment portfolio.


Getting a down payment for your new home can seem daunting, especially when there’s a tight home supply like the Sacramento real estate market. However, understanding the various financing options available can help you achieve your goal quickly and efficiently.

So whether you’re looking to buy a single-family home or a condo, talk with a local lender about which options will work best for you and partner with an excellent real estate agent. 

Are you looking to buy a house? Contact us today for a free consultation. 

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