So you want to buy a house… but you’re a little short on the downpayment. Have you ever thought about taking up some sort of “side hustle”?
A side hustle can allow you to bring in some extra cash outside your full-time job, helping you with that down payment savings plan. Anything from: mowing lawns, to walking dogs, shovelling snow, babysitting, tutoring, making deliveries, becoming an Uber driver, selling products on Amazon, participating in focus groups, blogging, vlogging, marketing – truly an infinite number of side hustles exist and new ones are waiting to be created.
Keep in mind – the side hustle can help you come up with the extra cash, but may not increase what you qualify for… in some cases.
Even though a side hustle is extra income, it will be difficult to use that income when qualifying for a larger mortgage since we would still need to see a two-year history of that income source on your tax returns. BUT… What that extra cash can help you with is saving for that downpayment. Let’s take a look and see how a little extra cash could help you ultimately put more down as a down payment (and ultimately, could help you purchase for a higher home price):
You work your regular 40-hour work week and during your off time, you like to indulge. This means eating out at restaurants/take-out, shopping, going to the movies, clubbing, etc. We’re talking about $200 a week on these activities.
You work your regular 40-hour work week and during your off time you work towards developing your side hustle. Let’s assume you are able to work a few nights a week and make $200 a week extra income. Obviously you still want to have some fun, so on your “off time” you only spend $100 a week on these activities.
Let’s look at the scenarios after one full year of working.
In this case, your full-time job pays $40,000 a year after tax.
You have made $40,000 but spent $10,400 on fun. Now you are left with $29,600 to live off of while also saving for a down payment.
You have made $40,000 from your full-time job and $10,400 from your side hustle but spent $5,200 on fun. Now you are left with $45,200 to live and try and save for a down payment.
That puts an extra $15,600 in your pocket that can be utilized on paying down debt and/or saving for that downpayment.
Now that you have an idea of how that side hustle can work in your favour, find some time to brainstorm some of your own ideas so you can start making some of that extra money! If you have any questions, ask us how a side hustle could help you with your #mortgage application!