The biggest issue facing most borrowers in this market is still saving the down payment and closing costs! I thought I would list a number of resources that are helpful to would be purchasers that are a little short on cash.
- If you work for a company that has a 401K plan, check with your administrator to find out if you can borrow against your vested balance. Many plans allow for a loan up to 50% of your vested balance or $50,000 for a purchase of a home. Best part about this loan is that most of the time the payments will not count against your qualification ratios.
- Call your HR department or boss to see if your employer has a company program that will do an employer loan for the purchase of your home. This debt does count against you but I have helped borrowers whose employer had incredible rates of interest for such loans.
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- Cash in a Roth IRA for $10,000. Currently the tax rules allow you to pull up to $10,000 without penalties for the purchase of your first home. (you still need to pay regular income tax on the amount you pull and check with your CPA).
- Sell stocks or better yet, borrow against stocks or securities you own.
- Check with Non-profits or your church to see if they have any special down payment assistance programs.
- Sell or refinance a boat, car or RV.
- Get a gift from any family member or members (some programs allow for 100% gift funds).
- Find a co-signer or partner with someone with cash and purchase the property together (you can do an equity share agreement that splits the property price appreciation at the time of sale).
- If you are a veteran, you do not need a down payment as financing is available at 100% of the purchase price.
- Look for a seller that will carry a second (usually will not work in a seller’s market)
- If you have already saved around 3.5% of the sales price for a down payment there are programs available that allow the lender to pay all your closing costs.
Call me I would be happy to discuss your particular situation.
About Andre Hemmersbach
