So you are planning to buy a new home. The only problem is that you are worried that you don’t have enough cash to make the down payment. This is a huge challenge for all home buyers, down payments require paying at least 5% of the overall cost of a house up front.!
However, it’s important look at down payments not as an obstacle to buying your first home, but as opportunities. Once you have learned how much money you will need, then consider this an invitation for you to save up and think of smart ways to pool that amount together.
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This article shares some sources of cash for your next home’s down payment:
The Residential Location
When it comes to looking for down payment assistance programs, there’s no better place to start looking other than where you are currently residing. Local governments usually operate different types of programs and the rate of approval varies depending on the buyer. Some programs cater specifically to buyers whose incomes are either low or moderate. Others are dedicated specifically to people who are buying their first homes.
To qualify for these funds, some of these programs have certain requirements, such as picking a home that’s within their minimum condition criteria, the home buyer having a certain amount of funds in their bank accounts, or the home buyer completing a homeowners’ education seminar.
Families and Friends
Some home buyers get by with a little help from their loved ones. This financial help from your families and friends may come in the form of “gift money.” Most mortgage programs consider this kind of funding. Make sure to ask your mortgage agent what percentage of your down payment can come from gift money. The guidelines for each program vary widely and is usually based on the amount of your own cash.
Employers
Some municipal agencies, universities, and a few companies make down payment assistance available to its employees. Some companies even put out relocation assistance to lure high-level recruits. Check with the company’s Human Resource department if they have such assistance available. Sometimes, employers would offer relocation or down payment assistance to their top employees who are considering moving out.
Your Income, Assets, and Savings
Nothing beats the traditional practice of saving up to buy a new house. Your monthly income minus your expenses can very well make or break your ability to pay for your new home’s down payment. Take a hard look at your financial situation and reflect on what really matters. If the answer is a home, it’s time to review your spending habits and cross out anything that you don’t desperately need. At the same time, assess your assets and see which properties you don’t really need anymore and put them up for sale.
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