TO OBTAIN MONEY FOR THE DOWN PAYMENT
The lender is going to require that you come up with some form
of down payment, usually 5% of the value of the home. The amount
that you put down effects the lender's decision, the size of your
monthly mortgage payments and the amount of cash you have available
for other home buying cost. The larger the down payment you put
down , the lower your monthly payment will be, as well as the
amount of the total loan. Lenders will not require you to have
mortgage insurance if you are able to put down 20%. This can be
a substantial amount of savings toward your monthly payment.
Sources you may draw upon to come up with the down payment include
savings, life insurance policies, mutual funds, stocks and bonds,
pension funds,real estate holdings to name a few. Other ways to
accumulate the money for a down payment are, listed below.
Gift from a family member - Notarized documentation is
required to prove that the money is a gift, not a loan and must
be signed by the giver.
money from your IRA account - You may withdraw up to $10,000
without penalty, if used toward buying your first home.
against your 401K plan - Some 401K plans allow a withdrawal
when you use the money to purchase a home.Check with your plan
Sell or borrow against an asset - The loan payment will
be counted as a debt.
Use premium pricing to pay closing cost and/or prepaids
- This will reduce the amount needed for closing , however, the
interest rate will be a little higher.
Have the seller pay some of the closing cost and /or prepaids
- This will reduce the amount needed for closing without raising
the interest rate.
Down payment assistance programs - Ask your Loan Officer
if there are any down payment assistance available in your area.