Ways to Afford the Down Payment of Your Mortgage

Down Payment for Mortgage

The down payment of the mortgage is one of the main reasons why it’s still difficult for many people to get their own home. With the interest rate of mortgages getting lower than ever, many individuals are deciding to give up renting and go for owning their own place. There are several lenders and banks offering their mortgage service. However, down payment is still needed in order to acquire the mortgage. Those who are trying to purchase their first homes are faced with the dilemma of not having enough money to pay for the down payment. If you are in this situation, there are things that you can do to come up with the amount that you need. You don’t have to easily give up in getting your dream home as you can try the following.

Find a Second Job

Second Job

If your salary from your regular job isn’t enough, you may consider applying for a second job to help save for the down payment that you need. There are several people who are working two to three jobs and if you manage your time and priorities, you too can make it work. Aside from applying for a part time job in a traditional office or business setting, you may also consider getting a job online. Depending on your skills, you could find one that you can do after your regular work hours. Some of these online jobs include data entry, writing, programming, online marketing, customer service, tutoring and transcription.

Ask Someone to Give You a Gift

This may not be an easy thing to do, but you could sure give it a try. If you know of a very rich relative or friend that could give you some money that you could use for the down payment, that would be a huge help. This could be considered as a gift and it would not be taxed. You as the receiver would also not be taxed for it so you can use it entirely for your down payment.

Borrow from Your IRA

Your individual retirement account or IRA can be used as well since according to the law, you can use up to $10,000 of your IRA for the down payment of your mortgage. If you’re married, your spouse can also tap $10,000 on his/her IRA and this could potentially give you $20,000. If you didn’t have a primary residence or your own home two years prior to your new home purchase, you may not be fined for the early withdrawal of your retirement money. However, you may be taxed depending on the type of IRA account that you have.

Get Money from Your 401(K)

Employers usually offer 401(K) plans to their employees. This is a retirement plan in which your contributions are automatically deducted from your salary. Like the IRA, you may also withdraw money from this retirement plan. However, you need to pay it back, which is not required from IRA.

Sell Things You Don’t Need

Selling Used Items

When was the last time that you organized your home? If it has been a while, things that you no longer need or use could be piling up in your place now. Do a general cleaning and start a garage sale. This would not just give you more space in your house, but it would let you turn those unused items that are just stuck there into cash.

Find Programs That Could Help You

There are state programs that help residents in paying for the down payment of their mortgage. For instance, the Virginia Housing Development Authority offers qualified applicants with a second mortgage that would cover for their down payment and other costs.

You can finally purchase your very first home with these tips. If you can think of other ways to get the money you need for the down payment, type your comments below.

 Photo Attribution:

Featured and 1st image by Brett VA [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

2nd image by Matthew Bowden www.digitallyrefreshing.com (http://www.sxc.hu/photo/145972) [Attribution], via Wikimedia Commons

3rd image by ResaJoan (Own work) [CC0], via Wikimedia Commons