Five Easy Ways To Finance Your New Home
Friday, September 20, 2013, 6:00 AM | Leave Comment
Buying a house is a great achievement and certainly part of your own American dream. However, homes are one of the most expensive purchases that you will ever make. Fortunately, there are many tools available to help you save for your next home.
Here are some of the strategies that you can use to finance this purchase.
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Ask For Contributions
FHA loans allow you to ask friends, family members, and your employer to contribute money toward your down payment and closing costs. As long as the contribution is properly documented, there is no limit to the amount of money that can be given to you. This can be a good way to get a loan without going through a lengthy process.
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Use Money From A Retirement Fund
If you have money in a self-directed 401k, you may be able to loan yourself money from that account that can be used to pay for your down payment. Those who decide to use this option should understand that the loan must be repaid according to the loan agreement. Otherwise, the distribution will be considered taxable income.
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The Government May Be Willing To Help
Buyers searching for their first home should look into government programs that are designed to help them secure a home loan. Many programs allow you to finance 100 percent of the purchase price of the home, or offer matching funds that give you a dollar for each dollar you promise to use for your down payment.
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Save Money By Having The Seller Pay For Closing Costs
Sellers can agree to pay up to 6 percent of any closing costs related to the sale of a home. This amount is deducted from the overall amount of your mortgage, and can also increases the amount of your down payment as a percentage of the loan. For example, a $10,000 down payment on a $100,000 loan is only 10 percent of the mortgage. However, a $10,000 down payment on a $90,000 home is almost 15 percent of the mortgage.
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Sell Your Current Home
You can use proceeds from the sale of your last home to use toward your next home. If you are moving into a smaller home than the one you currently live in, this can be a great way to make use of your sale money. You can go online to find the best storage units in San Diego to store your bigger furniture pieces until they can be safely moved.
Financing a home purchase can be tricky if you don’t have a lot of money. However, you can come up with a down payment with ease if you know where to look for help. If you currently own a home, you can sell your current home, and use the money for your next one.
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