No Gift Money? No Problem: How to Afford a House On Your Own

When you’re saving for your first home, it’s natural to wish for a helping hand. It might even feel like everyone else is getting a check from Mom and Dad. But if you don’t have a financial head start, where should you begin?

The good news: Homeownership isn’t just for the lucky few with a windfall. In fact, most first-time homebuyers don’t wait for one. According to the National Association of Realtors, only one in four first-time buyers used a gift or loan from family or friends to fund their down payment.

If you don’t have gift money to help buy a house, you’re not alone. Here’s your guide to getting it done.

Stop the mental doom loop

From high prices to mortgage rates, there’s a lot that feels unfair in today’s housing market. Scrolling through a social feed full of success stories can add to feelings of guilt and shame, says Rahkim Sabree, a financial therapist and accredited financial counselor.

“Too often, especially with social media, we start kind of getting whisked away in the possibilities of what can be — and that's when we start comparing our journeys to other people's,” he says.

The solution: Focus on your own values and priorities. After all, social media only shows someone’s highlight reel.

“We don't know what it is that they have had access to, what kind of debt they had to go into and what longevity looks like, unfortunately, in their purchase,” Sabree says.

It may sound simple, but a can-do attitude can be a major power move. Once you’re in the right headspace, try an online calculator to see how much house you can afford. With a realistic budget, you can move from planning to action.

Assemble your squad

You don’t need a big check from your parents — but you do need a team of homebuying pros to have your back.

If the whole process seems overwhelming, start with a housing counselor certified by the U.S. Department of Housing and Urban Development (HUD). Anyone can benefit from their advice, especially buyers with credit challenges or a history of bankruptcy. HUD-certified counselors are available for free or at a low cost.

Next, find an experienced buyer’s agent who knows your local market. A great agent can spot a deal fast and hustle to get your offer accepted.

Then, find your mortgage matchmaker. Get pre-approved with at least three lenders to make sure you’re getting the lowest interest rate.

Another option: Have a mortgage broker shop around for you. Brokers charge a fee, but they have access to wholesale pricing and can often negotiate a lower rate than you’d find on your own.

Boost your budget

It’s no secret: There’s free money up for grabs for first-time homebuyers. If you don’t look into down payment and closing cost assistance programs, you could be leaving thousands of dollars on the table.

Start by looking at state housing agencies, local governments and nonprofits. Other sources include your employer, labor union or mortgage lender. Most money is set aside for first-time buyers with incomes below the area median, but some programs welcome repeat buyers or higher earners.

Arica Rucker, broker owner with Century 21 Rucker Real Estate in Charlotte, North Carolina, says most of her buyers don’t have family gifts, so they’re excited to discover they can get a financial boost.

“They’re in disbelief,” she says. “But then we run into the reality of them not really having money saved for the out-of-pocket expenses.”

The lesson: Even with down payment assistance, you’ll still need cash on hand once you go under contract. Have money saved for upfront expenses like your earnest money deposit, home inspection or moving costs.

Get creative

To snag a deal, consider less common options like short sales or foreclosures. If you’re up for the responsibility of being a landlord, you can look into “house hacking” an investment property, like a live-in duplex. These are all more complex transactions, but an experienced agent and loan officer can coach you through it.

Some creative financing options are riskier than others. Your homebuying squad can also help you understand the pros and cons of borrowing from any retirement funds you have saved, like a 401(k).

“Ideally, you would not touch that money,” Sabree says. “But in a situation where an individual doesn't have access to gift money and they need to be creative around how to make the acquisition, certainly that's something that they can do.”

Stay centered

Focus on your own journey, not someone else’s. Gift money helps, but it doesn’t guarantee an easier path. An inheritance can come with the massive weight of grief. A gift from living relatives can come with its own challenges, like blurred boundaries or an uneasy feeling that you “owe” the giver.

Instead, take charge of what you can control: Getting scrappy to reach your savings goals.

“Get a plan, write it down, make it specific,” Rucker says.

Sabree, who specializes in overcoming financial trauma, says it’s normal to shut down when you feel overwhelmed. In a state of despair, you might even convince yourself it’s foolish to want to buy a house at all.

Instead, when emotions run high, show yourself some compassion and try to stay focused on your goal.

“Make sure that you're grounded in the now, right?” he says. “Make sure that you can feel the floor beneath your feet.”