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DOWNPAYMENT OPTIONS
The thought of generating a 20% down payment for a home can be overwhelming for most. There are MANY options available to a borrower. Most importantly, obtaining the information regarding the options is generally FREE. Call a reputable lending professional and ask them questions about the many plans and programs available to you. Below, are just a few options out of many to consider when investigating the plan or program that works best for you:
Personal Savings (including IRA's & 401(K)'s). Find out if your company allows you to borrow for a home purchase and what terms and conditions apply. Get a clear idea of what the interests rates will be. What, if any, are the penalties or requirements for payback if you leave your job or are terminated. Know the timeframe in which you are expected to repay the monies borrowed during employment or after. When considering an IRA for a first time home purchase, in most cases you can withdraw up to $10,000 from your IRA without paying a penalty to help pay for a first home for yourself or family member.
State and local programs for low and moderate-income families and for first-time buyers. Again your lending professional would be able to lay out the many plans and programs available to you.
Proceeds from the sale of an asset (i.e stocks, bonds, real estate).
Gift funds from a living relative. Please note that if the sole source of the downpayment is the gift without any monetary contribution from the borrower, the lender may require some personal funds to be contributed. Also, there are times when lenders require a borrower to produce a signed gift letter as further proof the money is a gift to the borrower and not a loan.
Call your local lender and ask about a no-down loan or a low-down loan. Some lenders will finance 100% of the sales price. Or there are many options in which you can get a loan for 80% of the home's price and a second loan (at a higher interest rate) for 20%.
Rent/Lease using a lease-option to buy contract. Be sure to have legal representation review your paperwork when drafting and finalizing the details of your contract. When ready to purchase, call me at 310-508-4354 to protect your interests and to close your transaction.
FYI: Did you know, that if you haven't owned a home or been named on title for a full 3 years, you too are considered a first-time home buyer?
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