Thinking of buying a house? It’s a smart investment, and probably the largest one you’ll ever make. But a lot of people looking to buy a house find that there’s a big obstacle standing in their way: the down payment.
How do you get that kind of money together? You can save, of course, but that could take many years, depending on the loan you’ll be taking out. But don’t despair! There are some other alternatives:
- Save money. You have to be smart about saving. Try and find a way to make your money work for you instead of just sitting there. A money market account or a certificate of deposit can be good options for mortgage down payment savings.
- Look into programs offered by the FHA (Federal Housing Administration) or the VA (Veteran’s Administration) to see if you might qualify for a lower mortgage down payment.
- Use your retirement funds. Some 401(k) and 403(b) retirement plans allow you to borrow from them for a new home purchase.
- If this isn’t your first home purchase, then you can use the equity from the home you’ve just sold as your mortgage down payment.
- Receive a gift. Not every mortgage lender will allow for the down payment to be a gift, though certainly part of it can be and certain government-backed mortgage loans will permit gifts as down payments. Check with your mortgage counselor to see what your state and situation allow.
One caveat: don’t use credit for your mortgage down payment. The rate of credit-card loans is the highest in the lending business, and borrowing from your credit cards will push up your debt load. It could even disqualify you from the mortgage itself.
For the past few decades at Avrus Financial and Mortgage, we’ve been helping people figure out how to manage their finances so that they can find a down payment, and we can help you, too!
Why not ask us how… today?
