DOWN PAYMENT
Like any type of loan, the amount you have available up front can play a major role in the loan you may qualify for, plus the amount you’ll need to pay off. Down payment requirements range from 3 percent to 20 percent of the sales price for property depending on the number of units, credit score, mortgage program and residency. i.e. a primary residence conventional loan can be as low as 3$ down ; where an investment property for a single family home requires a minimum of 20% down. Research your mortgage options.
Thankfully, there are a number of smart ways to procure your down payment:
- Down Payment Assistance Programs
- Save
- Borrow from your retirement plan
- Monetary gifts from family
- Move/relocate to more affordable housing
- Reduce your outstanding debt
- Strike a lower deal with the seller
- Sell stocks/investments
- Obtain additional employment
- Skip vacations and entertainment expenses
IMPORTANT NOTE: CASH is not a valid source of down payment. Gifts from relatives in the form of CASH are also not a valid source of down payment. The reason is that ALL the funds used for a mortgage transaction must be originate from legitimate sources. i.e. verified employment income, retirement accounts, down payment programs etc… These sources of assets can sourced from its origins; meaning the lender can see where the money came from. Unfortunately CASH is a type of transaction that Can Not be sourced and hence any cash deposits must ne backed out of a borrower’s qualifying assets.