Having enough money on hand to pay your down payment can be a major roadblock when it comes to buying a home. While you might be more than capable of making your monthly mortgage payments, actually finding the money to cover that large lump sum that secures your home in the first place is something that many buyers struggle with. If you are struggling with this aspect of home buying, there are ways you can raise money for your mortgage without breaking the bank. Here are a few suggestions:
- Borrow from your retirement. Unlike other investments that are very risky and may not actually bring you the rewards that make borrowing from your retirement fund worth the risk, borrowing a little from your 401(k) is a safe bet. Homes, over time, increase in value—they very rarely lose value, especially if you put the time and energy into maintaining that home. That means that you can easily make back that money.
- Ask family members. While borrowing money from family members is not always the best way to raise money, when you are trying to draw together a lump sum for your mortgage, your family might be more inclined to give you a gift or a loan. One of the bonuses of borrowing from your family is that they probably won’t charge you interest while they wait for you to pay them back.
- Discuss the down payment with the seller. Often, if a seller is very motivated to sell, they are more than willing to help you with the down payment. This can mean a faster and easier close for them. Keep in mind that while it is illegal for a seller to pay the down payment directly, they can give money to a third party, who can then forward the money on to you.
- Sell your stuff. You’re going to be moving soon, anyway, and moving with less stuff is always easier than moving with lots of stuff. Sell your unused items on eBay or Craigslist and you might be able to scrape together the few thousand dollars you need to round out your down payment.