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Sometimes, even the most severe personal
budget cuts don't help build your cash reserves as quickly as you'd
like, and the savings process is discouraging. While it is important
to be mindful of your daily expenses, there are other ways you can
increase your funds for a down payment.
Talk to your parents, relatives, or
long-time, close friends for assistance. They might not have any money
to loan you, but one of them might be an excellent candidate to
co-sign your mortgage application to strengthen its chances for
approval.
Take a second job and vow to set aside
all the earnings for the down payment. You can quit after you've
acquired the mortgage and moved into your new home, provided your
salary from your primary job meets all your obligations.
Raise your tax withholding allowances to
the legal limit so that you'll keep more of your gross pay. The extra
cash can be added to your down payment savings, and with the tax
breaks from buying a house, you'll come close to breaking even when
April 15 rolls around.
If you own securities, sell them, or
borrow against them. Talk to your broker.
If you're single, considering buying a
home with a friend. Split the down payment, the tax benefits, and the
future resale profits. Lenders will consider that two incomes are
better than one.
If you have a boat, an RV, a second car,
or a motorcycle, consider selling it, or using it as collateral.
If you can bear to part with your
collectibles or heirlooms, investigate their value.
Consider an outside investor who would
contribute to the down payment and let you shoulder the monthly
mortgage payments. When the home is sold, the two of you would split
the profits.
If you have an IRA, you can, as a
first-time homebuyer, withdraw money for a down payment. A law
effective in 1998 removed the standard 10 percent early withdrawal
penalty. Also, look into borrowing against your retirement fund at
work.
Talk to your insurance provider and see
if cashing in on the value of your life insurance policy is a
possibility.
Leasing with an option to buy is
sometimes possible, depending on the needs of the seller.
Some government loans require little
cash down. The Federal Housing Administration (FHA) sometimes requires
as little as 3 to 5 percent down for qualified buyers. The Veterans
Administration (VA) offers a program for veterans that requires no
down payment.
If you have other collateral, such as
jewelry or a valuable car, the lender might consider that in lieu of
all or part of the down payment.
A seller may be able to carry a second
mortgage for you. A seller's willingness to help the buyer in this way
is usually made known through their agent. It doesn't hurt to ask.
Taking
care to stretch your dollar as much as possible is helpful, but coming
up with some additional resources can pump up your down payment more
quickly and turn you into a homeowner sooner than you think!
Copyright 2004
PropertySource Network |
