Eight ways to come up with your down payment

  1. Save. It sounds so simple, and it is. Just tell yourself you’re going to put aside a certain amount of your income before you spend it on anything else. Then do it. Have a plan, and be patient. If you need $2,500 and you save $100 a month, you can have the money in just two years.
  2. Sell Something. Maybe you have a boat or some other personal property you could sell to raise money. It may be tough to part with, but if doing so will help you get the home you’ve always wanted, you may be smart to sell it. You can always get another boat.
  3. Get a gift. If your parents can afford to give you the money for a down payment, great. Most parents are anxious to have their children invest in a home, and if they have the money, they may be glad to help. Even if your parents don’t have any spare cash, they might consider getting a home equity loan on their home–to help you get a home.
  4. HUD Bridal Registry. Planning a wedding and thinking about buying your first home? The US Department of Housing and Urban Development recently introduced a program to help young couples accumulate a down payment on their first house through a bridal registry account with a qualified bank.
    To learn more, visit www.hud.gov/bridal.html.
  5. Borrow against assets. If you go to a bank and get a personal loan, that obligation will be considered a liability and could have a negative effect on your getting home financing. But, if you can borrow money against a 401K plan, a profit-sharing plan, a life insurance policy, or a savings-and-investment plan, the amount you borrow will not be considered a liability. It’s a way to put the "cash value" on one or more of these plans to work for you now.
  6. Get a VA loan. If you’re a veteran you can buy a home with a Veteran’s Administration-guaranteed loan and not have to worry about a down payment at all. There is none. Or, if you’re still in the armed force reserves, you might still qualify for a no-down-payment loan under the FHA/Vet Loan Program.
  7. Get a total acquisition loan. If you’re not trying for a FHA-guaranteed loan, you might qualify for a FHA Total Acquisition Loan. This plan lets you finance your closing costs, too. And, while it doesn’t eliminate the down payment, it can reduce your up-front expenses significantly.
  8. Get Help! You may qualify for one of the various state, county or local programs designed to help first-time home buyers and low-to-moderate income families obtain low interest financing and down-payment funds.

 

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