Coming up with a hefty down payment can be intimidating, but with a little work and ingenuity you can do it. Here are a few ideas for coming up with the needed cash:
1. Down-Payment Assistance Programs
Many states offer down-payment assistance programs. You must go through an application process and qualify based on income and credit, but if you do qualify, these programs are amazing. Typically you will receive a grant for the amount of your down payment; it's basically free money from the government to encourage responsible citizens to buy their first home.
2. Try to Qualify for an FHA Loan
If you qualify, an FHA loan can make first-time home ownership much easier. FHA-backed loans typically offer more manageable down payments (as little as 3.5 percent compared to the 10-30 percent required for conventional home loans). These loans are subject to credit requirements but sometimes less stringent ones than other loans.
3. Help from Family
If your parents or other relatives are in a financial position to help you purchase your first home, they may be happy to do so. Approach the conversation with a gracious and humble mind frame and don't expect a specific outcome. Emphasize that you are ready to become a homeowner and begin solidifying your financial future, but that you don't have enough cash on hand for a down payment.
Perhaps you are planning to get married in the near future. Instead of asking your parents to help you pay for the wedding, ask for help with a down payment—a smaller, more modest wedding may be well worth becoming a homeowner. As long as the gift is less than $13,000 (or $26,000 for a couple), you shouldn't have to pay income taxes on it, either.
4. Boost Your Income
Instead of looking at your current income and thinking that saving a chunk of money is impossible, ask yourself how you can earn more money. Options include freelancing on the side or getting a job on the weekends working retail or at a restaurant. No matter how you choose to boost your income, the main goal is to continue living on your old income while putting away any extra money.
5. Borrow from Your IRA
While taking out a loan from your retirement account is generally frowned upon and penalized with taxes and early-withdrawal fees, one exception is borrowing from your IRA specifically for a down payment on a house. If you qualify, you can borrow up to $10,000 penalty-free toward a real estate purchase.
We understand that for many people, buying or selling a home is probably the largest investment decision that they will make in their lifetime. Halo Group Realty LLC thus became active in selling Real Estate in 2008 and was setup to make this process a simple and painless transaction. Your dedicated agent will guide you every step of the way to make purchasing or selling your home enjoyable and exciting… as it should be!
Today, Halo Group Realty LLC is at the cutting edge of technology in offering assistance to those in need of real estate services, and we have revolutionized the method of delivering education to consumers. Halo is established as the place for consumers to get the knowledge and assistance they deserve in the process of facilitating the Real Estate transaction, positioning you in the best possible situation to get the best price when you either to buy or sell. With leadership, innovation and forward thinking, Halo Group Realty, LLC is poised to make a huge impression in the real estate market while providing clients the keys to home ownership.
Our goal is to help make your dream a reality and take away all of the stress that goes along with purchasing or selling your home. Whether you are purchasing new construction, an existing home, or just an open space for future enjoyment, representation by a Halo agent is a valuable tool in making your dream become a reality.
Buying a home is one of the biggest investments you'll ever make. An
"Using Morgan as our realtor helped make this very stressful and overwhelming process of selling and buying a house easy! Not only is she extremely knowledgeable about the market here in DFW, she works so hard for her clients. Throughout the process, she went above and beyond the scope of her job descriptions from answering our many questions to hunting down the best rates on a moving company. More than all of that, she makes the time to get to know her clients in order to really figure out what their needs are. Morgan did a fantastic job with our listing and we had multiple offers by the end of the first night! Ended up accepting a fabulous offer less than 24 hours after we listed and I truly believe that without Morgan we would have had to wait longer than that. I cannot recommend Morgan enough. This market has a million realtors saying they'll get the job done- luckily Morgan does more than just getting the job done. If you're looking for a personal experience with a realtor who will go above and beyond for your family, Morgan is the realtor for you!""