Days of Our Loans

Film Debut:

May 2009 - Sources of Down Payment  

The film is a comedy designed to drive home the point that there are acceptable sources of down payments for mortgage loans, but bank robbery is not one of those sources. In addition, the information below explains the acceptable sources of a down payment. 

TOP 10 WAYS TO GET YOUR DOWN PAYMENT

The 2009 Housing Stimulus package has become law. One of the provisions includes a new tax credit of up to $8,000 for first-time homebuyers, who purchase a home before the end of November 2009. The difference between this and the previous tax credit is that this tax credit will not have to be repaid if the borrower lives in the home for three years or more. While this is great news, the most common issue for a first time buyer still remains. How do I get the money needed for down payment on a home purchase? Here are ten ways to do that:

• Get a Gift – With FHA financing the buyer can get a gift from a relative for the down payment and closing cost. A gift letter signed by donor and recipient as well as evidence of donor’s ability to give the gift will be required.
• 401K loan – You can borrow the money from your self, in most cases this loan will not count against your qualifying debt to income ratio and as a first time homebuyer the most 401k programs will allow this transaction.
• Life insurance – If you have a whole life policy you can either borrow against it or cash it in. Since most of these are purchased with after tax dollars there are no tax implications.
• Secured loan- If you have an asset that is free and clear such as a vehicle you may be able to get a secured loan against the value of the asset.
• DPA – Several Government entities offer down payment assistance programs for first time home buyers.
• Sale of personal property – With verification of value and a bill of sale, the funds from the sale of personal property can be used for the down payment.
• Human Resources – Some Employers offer down payment assistance as a benefit to their employees. These awards are eligible for down payment through FHA financing.
• Tax Refund – Our buyer can use this year’s tax refund to become a homeowner. A copy of this year’s tax return and a copy of the refund check or bank statement showing the amount of the refund on deposit is all that is required.
• Second Job – Even though we may not be able to use this income to qualify the borrower if the borrower has not had the job for two years, the cash earned from this second job can be used for the down payment. Pay stubs from the second job and bank statements can provide a paper trail to source the funds.
• Savings/Budgeting – Cutting back on extras along with any one of the above mentioned ideas will get our buyer into a home faster.

#1 Way Not To Get Your Down Payment: Bank Robbery