Buyers

Best Ways to Build a Down Payment

One of the biggest hurdles for many prospective home buyers is finding a way to accumulate enough money for a down payment. Here are some suggestions on ways to raise the funds you’ll need.

Start by minimizing nonessential expenditures. Get in the habit of paying with cash and not buying things you can’t pay for immediately.

Talk to your parents or relatives. They may be willing to make a private loan to you, or they may be willing to co-sign on a mortgage.

If you have a “whole life” life insurance policy, you can look into borrowing against its cash value.

If you own other real estate, you could borrow against your equity.

If you’re a first time home buyer, you may be able to withdraw money from your IRA or retirement fund penalty-free.

Consider selling personal items such as a second car or boat.

Explore FHA and VA loan programs. Many of these programs require low or no down payments.

Consider having an amount withheld from your paycheck and direct deposited into a savings account.

Pay down high interest credit cards and limit your credit card use.

With some discipline and creative strategies, you will be well on your way to saving enough for a down payment.

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