5 Secret Sources of Down Payment Money
Down Payment: Coming up for a down payment for a new home purchase can often be the biggest test of our ability to save money we will ever face and sometimes may stand between us and our ability to become a new homeowner. We need to begin to look at saving for a down payment as less of an obstacle and more of an opportunity! Saving for a down payment can teach us money management, better financial planning, and the opportunity to begin to make clear choices about what is important to us. If your buyers are concerned that they may miss a good market opportunity by having to wait to save, here is a handful of less well-known sources for boosting your down payment stock pile.
1. Your City. National down payment assistance programs are a thing of the past, begin to look locally.
The best programs available are often operated by local government. Local down payment assistance programs (if offered in your area) can be found by searching governmental websites or by speaking
with your trusted local real estate agent or mortgage banker.
2. Your Parents and Family. Most mortgage programs whether Conventional or FHA allow for at least a portion of the down payment to come from a gift given by a parent or other family member .
Guidelines for allowable gift funds will vary based on loan programs so speak to your trusted mortgage banker about the different options available.
3. Your Employer. Universities and municipal agencies frequently make down payment and home buyer assistance programs available for first responders such as police officers, firefighters, etc.
There are often lower level companies that offer home buyer incentives based on recruitment or relocation packages. Check with your employers human resources division to explore whether any such assistance is available.
4. Your Income. Though you can save on coffee, shopping, and going out to eat, these things can often
only be a drop in the bucket towards saving. If purchasing a home is a top priority for you get gut- level real and go through your monthly spending with a fine tooth comb. Create a separate down payment savings account and redirect things like $20 coffee and oatmeal each morning (over $5000 added up) and set aside for a financial investment into a new home.
5. Your Assets. Some retirement accounts allow you to borrow against or pull out funds, penalty free, to apply them towards your down payment on a home. Speak with your trusted financial advisor,
mortgage banker, and real estate agent to run numbers and discuss the long term benefit, gain in doing this. If you can repay the cash on your retirement account quicker by putting 10%-20% down on a mortgage for a lower interest rate then you could potentially by giving more each month to your mortgage holder, this may make financial sense.
***Content from Trulia.com