Many future buyers find it difficult to accumulate enough cash for a down payment, especially if they are saddled with heavy debt. With some discipline and creative strategies, you can probably come up with more cash than you think.
1. Ask your parents, other relatives or friends for help. If they can't give or loan any money, perhaps they'll agree to co-sign the loan.
2. Sell (or borrow against) other real estate you own.
3. Sell securities you own, or borrow against them through a loan from the stock brokerage.
4. Sell collectibles or heirlooms you own.
5. Cash in (or borrow against) the built-up value of any life insurance you have.
6. Withdraw money from your IRA. If you're a first-time buyer you can pull out $10,000 penalty-free (though you must pay state and federal income tax on it) to put toward your home purchase. If you're not a first-time buyer, pull out the very least amount you must. Otherwise, you will have to pay both the 10 percent penalty and income tax on an early withdrawal.
7. Borrow against your retirement funds. In some cases, the rate on the loan may be as small as 2 percent. If you add too much to your debt burden, however, you may not be approved for a loan.
8. Ask for help from your church, synagogue or other nonprofit organization.
9. Sell a boat, RV or second car you own and use the cash for the down payment.
0. Get a second job. It'll help you raise cash, and the extra income will improve your chances of qualifying for a loan. You can quit later.
11. Look for an investment partner who'll put up some or all of the cash in an equity-sharing partnership. You make the monthly payments and the two of you split the eventual resale profits.
12. Change the withholding taxes, if permitted, on your salary in anticipation of higher deductions when you get a mortgage. Your take-home pay will increase, giving you more funds to put toward a down payment.
13. Look for loan programs such as VA or FHA that require little or nothing down.
14. Use a lease option that lets you rent the house now and buy it after you save.
15. Look for a home with an assumable loan.
16. Pawn something you own and use the proceeds for a down payment. You can get the item back after you've moved in and can afford to pay the pawnbroker back.
17. Refinance your car or other vehicles and add the proceeds to your down payment.
18. Offer something other than cash (a car, boat, or collectibles) to the seller in lieu of a cash down payment.
Author:Jim Cavoto Managing Broker Phone: 720-309-3014 Dated: January 27th 2014 Views: 5,382 About Jim: Jim Cavoto has been serving Colorado Real Estate market since 2000. Jim carries both Real Estate Em...
Ion Real Estate is a hand-picked team of highly respectable experienced Realtors coming together to work with you. Please contact us anytime with any questions. We look forward to serving your Colorado real estate needs. Our experience and dedicated professionalism ensures our clients have exceptional representation every step of the way. At a time where bigger isn't always better, Ion Real Estate has chosen to remain a smaller, highly focused team in order to provide a level of personal service, attention and consideration to our clients that you simply won't find elsewhere. Our decades of experience in the unique world of Denver real estate positions us advantageously to handle all of your real estate needs
It's Spring and a great time of year to sell your home! Here are five&
How do I begin to thank you for the amazing experience you afforded me selling my condo? I have bought and sold a handful of homes and I've never had anybody work as hard or be so helpful. Your attention to detail, informative approach and willingness to assist in every way was such a pleasant surprise. Your knowledge of the market and negotiation skills are impeccable. Thank you so much for your kind, reasonable guidance. I am so pleased. I will tell anybody that will listen to me - "Call my real estate guy!"
You are simply the best.