5 Secret Sources of Down Payment Money

Down payment: the mere utterance of the term strikes dread in the hearts of many a homebuyer-to-be. Coming up with a down payment often seems like an obstacle that must be overcome, as it is the biggest test of our ability to save money most of us will ever face and it’s a test that stands between us and our ability to become a homeowner.

1.Your City. Most of us remember the days of the zero-down loan, the federal home buyer tax credit era. The keyword here is ‘memories’ - those days are long gone, as are the times when there were nationwide programs that allowed a home’s seller to ‘gift’ the buyer a down payment from the overall purchase price of the home.

2. Your Parents, Family and Friends. Many more home buyers than you might think get by with a little help from their friends (and relatives). Most mortgage programs will allow for some portion of your down payment to come in the form of ‘gift money,’ which is exactly what it sounds like: money someone gives you to help you buy a home. Check in with your mortgage pro about how much of your down payment needs you can satisfy with gift money – guidelines varies widely based on how much of your own cash you have to put down and what loan programs you’re applying for.

3. Your Employer. Universities and the municipal agencies that employ first responders like police and fire personnel frequently make available down payment and other home buying assistance programs to their staffers. So do some large employers or even smaller companies who are seeking to lure top-level recruits, in the form of relocation assistance programs. Check in with your employers’ Human Resource division to explore whether any such assistance is available - and if you happen to find yourself a hot prospect on the job market, consider trying to negotiate relocation or down payment assistance into your offer package.

4. Your Income. This is not about cutting out a cup of coffee here or there. Euro-style austerity measures are just too hard to keep up for the months or years it can take to save up a down payment. Rather, the idea is to get gut-level real with yourself about what’s really important to you. And if the answer is buying a home, then it’s time to go through your spending with a fine tooth comb and look for the leakage you can stop up - cash you can redirect to your down payment savings.

5. Your Assets. Some retirement accounts allow you to borrow against them toward your down payment on a home. Is it advisable for everyone, in every situation to deplete their RRSP to plug that cash into a house? Absolutely not. But there are situations in which it may make sense to get your down payment up to 20%, say, by borrowing a few thousand dollars from yourself.

Everyone: What off-the-grid methods have you or your clients explored for coming up with

down payment money?

Randy BettInvestment Realtor/Author/Investor

Real Estate Professionals Inc.Better Group Real Estate 202-5403 Crowchild Trail NWCalgary, AB T3B 4Z1

Phone:403-774-7464 Ext:1Fax:403-208-0082Toll Free fax:888-711-6801

Randy Bett www.BetterGroupRealEstate.ca