Where do I get my downpayment?

Alright, you want to take advantage of these low interest rates that are back down to 5% and below. You want to receive that $8,000 before December 1st that the Government is offering first time buyers which you are. You want to take advantage of the lower prices that the media is telling you about. BUT…..how in the world are you going to be able to come up with the down payment of 3.5% of the sales price? On a $150,000 priced home, you only need $5,950 dollars.

We have some suggestions for you. Try these on and see if any will fit.

1. Have a relative give you the money as a gift.
Documentation will be required to prove that the money is actually a gift and not a loan. Any taxpayer is permitted to give up to $11,000.00 per year to another person without having to pay a gift tax. Technically, your mother could give you $11,000.00 and give another $11,000.00 to your spouse. Your father could do the same. This would give you a total of $44,000.00 towards a down payment and closing costs. This could be your “inheritance” when you need it.

2. Borrow against your 401K or insurance policy.
You can also cash out your 401K but you will be subject to withdrawal penalties and payment of taxes.

3. Sell or borrow against an asset.
Selling an asset such as a car can help increase the amount of money you have available. Borrowing against an asset is also acceptable as long as you qualify with the additional debt.

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