Down-payment – 5 Tips to dodge this problem competently

Article by Jessica Bennet

It might be a good decision to purchase a house at the present time. You can get a good home at a moderate price. Besides, the lenders are charging low interest rates on the mortgage loans. All you need to do is take out a loan from the lender charging the lowest interest rate on the home loan and purchase a house.

Financial experts are of the opinion that it is much cheaper to purchase a home instead of renting it. The one thing which prevents individuals from purchasing homes is the down-payment issue. The lenders/financial institutions are asking borrowers to make as much as 15% down-payment on the mortgage loans, which is considerably a huge amount for the home buyers. So, it is just not enough to secure a low mortgage quote any more. You need to accumulate cash for making the requisite down-payment. Read on to know about 5 tips that can help you dodge this problem.

Tips to dodge the down-payment problem

Here are the 5 tips that may help you dodge the down-payment problem with competence:

1. Look for the housing finance agencies: Very few people are aware of the fact that local housing agencies actually help home buyers regarding the down-payment issue. These agencies help buyers by offering subsidized mortgage loans and financial aids. For instance, Virginia Housing Development Authority (VHDA) offers federal backed mortgage loans to the first-time home buyers to make the down-payments.

2. Create a plan for saving money: You must have heard about this tip from your friends and family several times. You may as well have become bored of hearing this tip. But this tip really helps you achieve your financial goals.

Consult an experienced financial counselor in your locality. He/she will create a savings plan for you. Start saving money according to this plan. It will help you gather sufficient money for making the requisite down-payment.

3. Secure a side job: Extra income can help you save more money in the long run. You just need to use it intelligently. If you are planning to purchase a new home, then you can use the money to make the required down-payment. Start looking for part-time jobs in your locality. It may be little difficult for you to find such a job, considering the present job scenario. But with patience, determination and luck, you can get such a job.

4. Seek financial help from family: If you don’t have sufficient funds in your savings account, then you can request your mom or dad to bail you out. You can request them to give you a financial gift. Make sure you parents sign a document stating that you are not liable to pay back the money. But keep in mind that you’ll be required to pay tax if the financial gift amount is more than ,000.

5. Take advantage of FHA program: Check out the FHA program eligibility criteria and find out if you can qualify for it. This is because, you only need to make 3.5% down-payment on the FHA backed home loans, which is quite low.

Finally, the last tip will be to withdraw money from your 401(k) account for making the down-payment. But you should follow this tip only when there is no other option. It is not a wise idea to exhaust your retirement funds early in life.

About the Author

Jessica Bennet with her vast experience in the mortgage industry has been associated with the MortgageFit Community as a Mentor. Not only does she participate in the community forums to give her suggestions, but also makes her contributions through different articles on mortgage.

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