9 Creative Ways To Get Your Down Payment

When buying a home in today’s market the more money you can put down the better in order to lower your mortgage. Below are some creative ways to raise money.

1. A Gift From Parents or Family Members  - If  you're like me the last thing you may want to do is ask a family member. But if you have someone you can ask in your family that is kind and willing to support you to get your home, then you may have to suck it up and ASK! 

2. Increasing Your Paycheck - Use your tax money now! Go to your payroll department and ask for a W4 form so you can claim more dependents (it’s perfectly legal, the IRS just doesn’t want the word to get out). Make sure you check with an accountant so don't go over your tax amount so you don't owe when you file for taxes.

3. Tax Refund - If you already plan to shop til you drop with your refund check, don't. You can use all or a portion of your tax refund to invest in your future.

2. Borrowing from a 401(k). When it comes to borrowing from a 401(k) plan, not every company allows it. Check with your plan administrator to see if your company will allow you to borrow, if there are limitations on what you can do with the cash, and what the interest rate will be on the money you borrow. You should also be aware that you'll typically need to repay this cash within 5 years. But if you should leave the company, or be fired, you'll need to repay the cash within 60 days, or it will be considered a withdrawal (and you'll owe federal income taxes on that money along with a 10 percent penalty, if you're under the age of 59 1/2).

3. Withdrawing up to $10,000 from an IRA -  If you have an individual retirement account (IRA), the IRS allows you to withdraw up to $10,000 for the purchase of a first home. (For those of you who have purchased a home before but haven't owned a home in the last 3 years, you're considered to be a "first-time buyer" for this specific purpose and can make a withdrawal). When you withdraw cash at any time from a tax-deductible, tax-deferred IRA, you'll owe federal income taxes on the amount you're withdrawing at your current marginal tax rate. However, if you're withdrawing for the purchase of a first house, you will not owe the 10 percent under-age penalty if you're less than 59 1/2 years old.

5. First Time Home Buyers Program - Depending on your qualifications there are first time home buyers programs being offered in your city and through lenders. These programs will help you with your down payment or closing costs. 

**Give me a call for the information.

6. Second Job or Hobby - If you have some additional hours on your hands try taking on a second part time job. If you have skills cooking, baking, sewing, baby sitting,  tutoring in a certain subject, type papers for college students or doing  resumes then you may consider taking on these tasks to put some extra cash in your pocket. 

7. Sell Items You Don't Need - Take a look around and see if you have clothes, furniture, jewelry, electronics, antiques, etc. Once you have found items that you no longer need plan a yard sale. If you don’t have a yard, then set it up in your apartment or sell on Ebay.  

8. Downsize - If you have to much space and you can downsize to a cheaper apartment, then do so to save  on monthly rent. Also, if  you are currently renting and have a spare bedroom, you can have a family or friend stay with you to share the rent. Another way is, if your parents or a family member has extra space then ask you if can stay until you save more to buy a home so you can save even more money. 

9. Sell Your Car - If you have a car or more than one car, you should think about selling one or all in order to obtain instant funds to use towards your investment. Remember, a car only loses value over time, while real estate increases in value over time.

 I hope this article helped you in your real estate process.

 

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