Where Can I Find A Down Payment For A New Home?
Posted by Richard on October 11, 2021
We really want to buy a house, but we are struggling to come up with a down payment. Any ideas?
If you have a regular work history, a reasonable credit score and modest debt, chances are good that you can qualify for a mortgage. The key is often the down payment, thought to be the single most important roadblock to home ownership.
According to Moody’s Analytics, renter households save about 2.4 percent of their income each year. It would take a renter about 14 years to save up $15,000.
Luckily, not everyone will need to save so much. There are some loans that require no down payment and others that offer very low down payments.
The USDA loan program offers a zero down loan and it is even possible to roll closing costs into the loan. You have to buy an eligible property, which is a home in a rural or suburban area. The definition of a rural area is fairly broad. If you know where you want to buy a house, you can search “USDA loan eligibility.” You do have to meet modest income and debt requirements.
FHA loans require very modest down payments of about 3 percent, depending on your credit score. In many parts of the country, you can purchase a 3-bedroom home for $100,000, making the down payment just $3,000.
You can gather funds for this down payment by using your own savings, or with gifts from family and friends (so long as they don’t have a financial stake in the property).
There are even quirky ways to add to your down payment. In August, the Federal Mortgage Association (called Fannie Mae) said that buyers could convert credit card reward points into cash to use for a down payment.