Where Can You Find the Money for a Down Payment?
One of the greatest challenges that first time home buyers often face is coming up with a down payment to get the ball rolling. If you had the money, in savings, investment accounts, or work bonuses, you wouldn't likely be inquiring. Here are some common places where others have found the money for a down payment on their mortgage.
- A withdrawal from a traditional IRA or Roth IRA. If this money is available to you, then there is no reason why you can't use it for your down payment. Be sure to talk to your banker about penalties and minimum amounts required.
- A loan against a 401K. This is another good option for those who need some extra cash. You may have to pay it back, but it will be worth it for you to get into your new home.
- Creative funding - the same as someone who doesn't qualify for a traditional mortgage.
- Pay off other debts, such as credit cards to free up extra money. As you pay off the debts, save that money to use towards your down payment.
- See if you qualify for a program that doesn't require a downpayment (or a smaller one).
- Ask if any family members are willing to help. This isn't a good idea for everyone, but if your folks or grandparents have helped out before, they might be willing to help with this endeavor. Make sure that everyone understands if this is a loan or borrowed funds.
Finding money for a down payment isn't always easy, but there are usually solutions. Sometimes, you will need to wait awhile to save money, pay off debt, or find a program that will work with you. However, in the long run, it will be worth the time and effort to get moved into your new home