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The Down Payment

What size down payment works for you? 

Zero down, with all or most of loan closing costs paid for you, and a nice sized check to you at closing? Ask me if you qualify. Marilyn does this frequently for Military Buyers.

5-10% down with no mortgage insurance?  Can do!

3.5% down - This is easy with an FHA loan - some of the down payment can even be in the form of a gift.

First time buyer?  Marilyn has programs available that will provide up to 1/2 your down payment and most allowable closing costs for you.

Want to buy a home to fix up and build "sweat equity"?  Marilyn can arrange a loan program that will allow you to add the fix up costs into your loan.

Standard 20% down?  This is easier to get than the media would lead you to believe.  Contact Marilyn for more information.

  

Tips for Accumulating a Down Payment

  • Save
    Look for ways to reduce your monthly expenditures to save toward a down-payment. You could enroll for an automatic savings plan at your bank to have a portion of your payroll automatically transferred into savings. Most people save a couple of years for their down payment.

  • Borrow the down payment from your retirement plan
    Check the provisions of your retirement plan. You can borrow funds from a 401(k) plan for a down payment or make a withdrawal from an Individual Retirement Account. Be sure you understand the tax consequences, repayment terms and/or possible early withdrawal penalties.  When you pay it back, you're paying YOURSELF the interest.  Be your own bank!

  • Move
    You may be able to save additional funds if you can move into less expensive housing.

  • Reduce other higher interest rate debt
    Paying off high interest credit cards will initially reduce your savings, but the money you will save will pay-off in the long run.

  • Make a deal with the seller
    In some circumstances, it is appropriate to ask the seller to carry a second-mortgage to cover your part of your down payment. Typically, you will pay a slightly higher rate for this second mortgage.

  • Sell some investments

  • Get a second job and save your earnings

  • Skip a year's vacation

  • Gift from Family
    Parents and other family members are often anxious to help children buy their first home and may have the means to give you a gift of money for a portion or all of your down payment.


  • Documenting Your Down Payment

    Documenting that the down payment comes from your savings and that you will have savings and/or assets over and above the down payment gives the lender confidence in your strength as a borrower and your ability to repay the loan.

    Take extra care to document the sources for any monies to be used for the down payment or closing costs.

    Acceptable Down Payment & Closing Costs Sources

    • Cash in a bank account
    • Mutual funds / stocks / IRA / 401K
    • Proceeds from the sale of another property
    • Gift from an immediate relative

    Click here to learn more about verifying your down payment, closing costs, income and debt.



How Much Down Payment Do I Need?

While I'm a Real Estate Broker, not a lender, I do work with various loan programs and lenders every day. I'm familiar with the basic requirements of over 30 types of programs. With some general information from you, I can help you plan for your new home purchase.

Just a few details, please