So you want to buy a house, but you’re short on the down-payment. Have you ever considered getting into some sort of “side hustle.”
The term side hustle describes something you do to make extra cash outside your full-time job. Anyone can make a hundred bucks on the side by literally doing anything – mowing lawns, walking dogs, shoveling 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 things you can do.
Even though a side hustle is extra income, it will be difficult to use when qualifying for a larger mortgage since brokers need to see a two-year history of that income first. What that extra cash can help you with is for a downpayment and hustle income is super charged. Why? Lets find out.
Option #1: 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.
Option #2: 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.
Option #1: 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.
Option #2: 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 life that can be utilized on paying down debt and/or saving for down-payment.
Now that you have the idea that a side hustle may work in your favour, brainstorm some ideas and start making that extra money! If you have any questions, contact your local Dominion Lending Centres mortgage professional.
Chris Cabel, DLMV