Down Payment Strategies |
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| The primary barrier to owning a home is the down payment that you will be required to come up with. There are several strategies available that can expand the options for the source of these funds, and leverage the money you have. | |||
| Seller Participation | Ask the seller to pay some or all of your closing cost. The real estate agent can advise you during the contract negotiations. | ||
| Gifts From Family | This is a widely used option, but it can get complicated. In some cases all of the down payment can be a gift, in others the first 3% or 5% of the money must be your own funds. There also may be tax implications for both you and the donor, so you may want to speak to a tax advisor. | ||
| Borrow against or sell an asset. | Any tangible asset you own may be converted into cash for a down payment. It could be a car, boat, stamp collection, etc... One thing to remember is the lender will want to see a bill of sale and perhaps even an appraisal of the item you are converting. The payment on the loan will probably be counted as a debt, and that may affect your qualification. Talk to the loan officer before taking this route. | ||
| Take the Reduced or No Cost Option Loan | Lenders will offer you a reduced, or no cost option on many loan programs. This can lower the cash you will need to close substantially. | ||
| Borrow Against Your Retirement | Your 401(k) is potential source for a low interest rate loan, or you can cash it in (subject to penalties). This fairly complicated and you should speak with a tax advisor and the loan officer before you make a decision. | ||
| Check out your alternatives | There are many different loan programs available, with different down payment requirements. Your loan officer can help you determine the best program for you. | ||
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Other Books In the Library Main Library Page <> Down Payment Stratagies <> Chart of Interest Rates <> Questions To Ask A Lender <> What Are Lenders Looking For? <> Why Buy A Home <> VA Loans <> FHA Loans <> Settlement Cost Handbook <> 3 Things To Avoid <> How To Get Out Of Debt <> Understanding How To Use Credit <> Credit Repair <> Appraisals <> Title Insurance <> Credit Scores <> Automated Underwriting <> |
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