Bankrate recently ran an article titled, “A dozen ways to get a down payment.” The article was pretty in-depth, but I’d like to take a look at how realistic their twelve suggestions really are.

1. Set up an automatic saving plan. — An automatic savings plan is a great suggestion. Almost every bank makes it easy to set up an automatic withdrawal from your checking to your savings. It’s just a matter of doing it.
2. Get a gift from your parents, grandparents, other relatives or friends. — Personally, I don’t think that gifts are the best way to come up with a down payment. There’s a lot of potential for family problems down the road. That said, some families are more than happy to help out.
3. Sell a car, boat, motorcycle, collectibles or other assets. — I’d like to see a show of hands: how many first-time home buyers have a boat lying around that they can sell? Sure, if you have assets you can sell, go for it. Not very many people have that option, though.
4. Liquidate stocks, mutual funds, savings bonds or other investments. — This is another ‘you can do it, but I don’t recommend it’ idea. A lot of investments will provide you far more income in the future than a house will. If there’s no pressing reason to move into a house, it’s much better to wait and save.
5. Allocate your income tax refund. — Your savings account is a great place for your income tax refund. And yes, I do think it’s more than reasonable to use it for your down payment. But be careful about relying on your income tax refund — it’s not always as big as you expect.
6. Take a loan from your 401(k) retirement plan and repay yourself with interest. — This is the worst idea ever, second only to the next one on this list.
7. Withdraw funds from your 401(k) plan, subject to taxes and penalties. — Withdrawing money from your 401(k) is essentially robbing your future self: that investment balloons due to compound interest. The later money is added, the less money you get. Furthermore, there are significant monetary penalties for withdrawing money from your 401(k) plan.
8. Collect on a loan that you made to someone else. — It’s nice to be able to collect on a loan, but very few people have outstanding loans significant enough to help them make a down payment. Furthermore, if the loan is to a friend or family member, it’s entirely possible the lender will never see a cent of repayment.
9. Get a bonus from your employer. — I’d suggest expanding on this idea: make more money in general. Open a side business, take on more hours, etc. A bonus is kind of like winning the lottery, though. I wouldn’t suggest counting on it.
10. Explore homebuyer programs for public servants, if you qualify. — There are programs meant to help public servants buy homes. There are also other programs, often through trade associations that provide some level of support for non-public servants as well.
11. Apply for a state or local government homebuyer down payment program. — You should take advantage of any home buyer program you qualify for. There may be a little added paperwork, but the financial help is more than worth it.
12. Use a private down-payment assistance program. — My only objection to private assistance is that there are a few scammers out there who will take advantage of you. If you need the assistance and just can’t wait and save, be very careful and do your homework on whoever you decide to work with.