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Finding A Down Payment

7/15/2013

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Almost everyone has heard about the dreaded  “Down Payment” and of how you need one of them to buy a home.  In most cases, you will need to have one. But really, that's not such a bad thing. Your down payment will reduce the amount of money you borrow which, in turn, will reduce the cost of interest. But the thought of raising a down payment is enough to make many otherwise qualified buyers fear calling a Realtor.

The very thought of a “Down Payment” has caused many qualified buyers to give up before they even begin to look for homes. They end up missing out on all the benefits available to those who now own a home.

Let's be honest. Saving money for a down payment does require self-discipline, time, and money management. But a side benefit to saving for a down payment  is that the money you are saving  will be small compared to the asset you will own.  And the time it takes you to save for your down payment could pass much faster than you can imagine. READ ON…

Did you know there are creative sources to help you reach your down payment goal?   With home prices on the rise, the longer you wait to purchase your home; the less home you’ll be able to afford. That's a fact. Time really is money.  The quicker you can raise your down payment money;  the better off you will be.

Let’s look at a few ways to quickly raise that down payment money.

HELP FROM THE CITY:   Remember the good old days of  “no money down” loans?   Well, those days are long gone!  And the programs that allowed the home seller to “gift the down payment to the buyers”?  They too are gone.

But while those opportunities have vanished, they have been replaced by some new helpful programs.  For example, many cities and counties throughout the United States have decided to help low income buyers by offering down payment assistance.  Some have “first-time homebuyer” programs which are designed for those who haven’t owned a home in the last 3 to 5 years. Often there are programs created  to allow buyers to purchase distressed bank owned homes.  The point is:  many cities and counties have pitched in to offer down payment assistance for many “new” home buyers. 

Does your city offer help? You probably won’t know until you call a real estate agent to help you explore your options.

FRIENDS & FAMILY:   There are many loans available that allow family (parents – grandparents - aunts & uncles, etc.) or friends to “gift” you a down payment.   Naturally, you'll need to think about the strain on friendships and family relationships that may occur when you take a gift.  In addition, many lenders will require bank statements from both the Giver and the Receiver. (Lenders want to know that the Gift is really a Gift and may even require signed statements that attest to that. No secret loans are allowed!)  But the letters and bank statements are well worth the effort and inconvenience...  Just ask all those smart families who are now living in their own home as a result of down payment gifts made possible by family and  friends. You may even be living next door to one of them right now!

EMPLOYERS:  Many employers offer relocation incentives. Frequently, colleges and universities have incentives for faculty and staff.  There are programs for members of Fire and Police departments.  Even small businesses have been known to offer assistance to keep or attract top personnel.  Check with the  human resources department at your place of employment to see if a down payment assistance program is in place for you.

And speaking of you…

YOURSELF: 

This is a wonderful opportunity to take charge of your spending and plug the little holes that leak many dollars you could be saving for your down payment.  Can you cut $10 or more  from your phone bill each month?  Could you switch to an internet based phone system like Vonage?  How about using a free virtual number from Google that forwards all calls to your mobile?  Did you know that Skype  has voice in addition to video calls!   Do you stop at Starbucks for a cup of coffee every day?  Eat lunch at a diner instead of packing  lunch from home?  Do you really watch that many movies on TV  or could a streaming Netflix account save you from large HBO and Showtime monthly fees?   Do you make a grocery list and stick to it, or are you like most people and purchase food and sundries on impulse?   Do leftovers rot in the fridge?  You get the picture. Most of us waste a great deal of money every single month. That waste can really add up!

 Take time to track your spending and you may find that making a few key changes can bring you closer to saving for that "dreaded down payment".  Soon, you could be owning your own home!


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    Karla & Joe

    We're the owners of Realty World ALL STARS and we play an active, hands-on  role in the operation of our company. We'll be glad to help you find the right agent to assist you in your real estate needs.Feel free to call us direct or send us a message.

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