Example: A person wants to buy a home that is selling for $500,000 and he wants to put down 20% ($100,000). Aside from a bank and his personal savings, where can he get this money from?
2007-07-21 03:30:46 · 5 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
Yes, other than family, there are very few options. You could take a loan out on your 401(k) if you have a balance in there. You could jack up your credit card balances - but that will severely limit your ability to get credit b/c of the high balance and the interest rates are so high.
It's tough for people just starting out to buy a house . . . . so your best bet is to go to the oldest family members and make a case that they can't take the money with them and that you're responsible and will put their money into a house that you'll take care of. One argument is . . . "why wait until you're gone to pass the money along . . . . when you can do it now and enjoy the use of the money by seeing me in my new house"
good luck
2007-07-21 03:38:26 · answer #1 · answered by djvcpa 2 · 0⤊ 0⤋
Get a parent to give it to you? You aren't going to be able to borrow it from a bank anyway. A down payment is supposed to be money that you already have free and clear, like from savings.
The lender will want to see that you already have the down payment money when they give you the loan. If it just showed up recently, they'll want to know where it came from. And if a parent gave you the money, THEY might have to sign a paper that it's a gift, not a loan.
If you borrow it, you'd have to pay it back, so it's not really a "down payment". The lender looks at your income and debts to determine your ability to pay back the mortgate - if you suddenly have an additional $100K in debt, that would affect your ability to pay back everything.
The reason for a down payment is so the lender is protected since you are starting with some equity in the home. You usually get a better interest rate if you have a good down payment.
2007-07-21 10:37:11 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
Look at your local down payment assistance programs within the county you plan on purchasing. This issues with these down payment programs is they are more designed for people with a lower income. Look on your local County, and City Websites for the housing info (down payment programs for guidelines). If you call a good lender they will research this for you.
You may try doing an FHA loan if you have 3% of the sales price to put down. These are good loan insured by the goverment and the rates are conventional rates.
2007-07-21 21:05:06 · answer #3 · answered by Martini Babee 4 · 0⤊ 0⤋
Family may gift it to you...Don't use retirement savings,they grow faster than real estate appreciation,historically...better to invest in tax deferred accounts than make extra principle payments,
2007-07-21 10:34:32 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Good ole mom and dad
2007-07-21 14:13:02 · answer #5 · answered by frankie b 5 · 0⤊ 0⤋