Raising Money for a Home Down Payment

by | Apr 25, 2013 | Financial Services

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Potential homeowners face many hurdles, but one of the biggest is the large down payment (up to 20%) typically required by lenders. However, there are many programs that offer Home Loans Bridgewater with a very low down payment, or none at all. Below, you will learn more on buying a home without a large down payment.

Getting the Money Together

The most sensible way is to save over time; you can also borrow against a 401k or other retirement account. Some people raise the money by selling valuables, and some rely on charity. The only unacceptable monetary source is someone who would benefit from the sale: a seller, realtor or bank officer. There are rules governing the submission of down payments, and you will have to prove that you didn’t obtain the money illegally.

Saving Your Money

Many people wait to buy a home until they’ve saved enough for a down payment. When making that payment, keep these things in mind:

If you’re taking your down payment out of a joint account that you own with someone whose name is not on the mortgage, you will need a letter from them proving your 100% access to the funds. If you’re not able to access 100%, you will have to prove what percentage of the money you’re able to use.

You can’t just pull money from your cookie jar or from underneath the mattress and put a down payment on a home. Open a bank account, deposit the money, document your expenses, and you’ll prove that you’re reliable enough to save money over time.

Don’t withdraw your down payment from a business account. It will trigger more questions from loan underwriters; business accounts usually aren’t used for personal reasons.

Help with Down Payments

Assistance can come in the form of a grant or a low/no interest loan. You may qualify for help if you meet certain income requirements, buy a home in a certain area, or taking a class on home ownership.

Selling Assets

Whether you get the money for a home down payment from an inheritance, tax refund, lottery winnings or any other source, you will be required to prove that the money was yours to spend. When you apply for Home Loans Bridgewater, the loan officer will tell you which documents will prove your claim.



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