Any ideas on new house down payment?
So my question is, does anyone know of any grant programs for the middle class? We don't qualify for many of the "low-lower income" programs. I guess that is what you get for working 3 jobs throughout the entire year! ~Wendy, Josh, and Maggie |
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| Can you write it into the offer you make? When we sold our
house we forked over for a bunch of different things, and one of them was 3% for their down $$ The offer stays the same it's just the final figures are different at closing. Ask the realtor if you have one, or ask whoever is presenting the offer to the seller. If they are anxious to sell, they will at least consider it. Good luck! Buying a new home is always really fun, but a bit stressfull. Shellie |
| If I recall the mortgage rules correctly (and if they haven't changed), if you have a 401K and can borrow from it, you can use that as (part of) your down payment. If you have a regular IRA you could cash it out, but it comes with strings...
20% (or 31%) of the money you take out will be withheld for taxes immediately. If you keep the money out you will owe taxes on the withdrawal amount, the top of your regular tax bracket plus a 10% penalty. If you pay back the money in 60(?) days, you won't owe a penalty, but you'll have to come up with the full amount, even though you had a lot withheld. That can be tough. (You'll get any excess withholding refunded when you do your tax return next year.) There will be a one-time Federal tax credit of I believe $8,000 for first time home buyers, so you will get that as part of next year's tax return as well; so that would probably offset any taxes and penalties you had to pay to cash out your IRA. I am not extremely familiar with all of the rules of a Roth IRA, but you can also take money out of that, but there are rules about keeping it in for certain periods of time and so forth that I am not familiar with. You may get the money as a "gift" from friends/relatives, but they will need to sign a letter stating that the money was a gift. I suspect that most of those "gifts" are really loans.  Someone (with money) would really need to trust you to sign that and then still expect to be repaid.
What Shellie says sounds pretty good -- if you can offer a higher sales price, say $265K, with a $10,000 rebate at closing for say, a needed new roof, or some other "problem" that "needs" to be fixed, some underwriters might allow that to be taken into consideration, but I'd suspect that things like this have tightened up recently. You'll still need to show that you have had some money in the bank (or in your IRA or in your 401K) for some time -- even if under this scheme you don't actually have to cash them in. Good luck. It's a good buyer's market out there right now, and I'm hoping that housing prices have stabilized. It sounds like a great deal, but remember -- a house is only worth what someone else is willing to pay for it, so if they couldn't sell it for more than the $255K for which it is being offered, then $255K IS what it is worth right now. |
| I don't know how the laws differ from state to state, but you
can have money "gifted" from the sellers at closing. That is sort of how ours worked out. The only thing you have to be very careful of is that the inflated (or not) price you offer is not above market in the area. The bank is going to send someone out to give a basic value for the house, and will also compare it's value to other houses of similar construction and value that have recently sold in that area. If the house value doesn't come up to the amount you want to mortgage you may have trouble getting the loan. Remember credit score, ability to pay, and several other factors can influence the course of this process too. Also, remember that your monthly payment will not only include the loan amount, but also escrow for homeowners insurance, PMI(depending on the lending place and %of down) and all taxes. That can significantly increase the payment. I don't know if you are a first-timer, but years and years ago when we did it the first time there were things we hadn't considered going into it. Shellie |
| Talk to a lender about your financing options. If you are a first-time buyer, there may be local or state programs in your area that can help. And have an agent representing you talk to the listing agent to find out where in the "short sale" process it is. I am a licensed agent, and sometimes the short sale is just wishful thinking on the seller's part and the bank won't go along with it. You may have to be prepared for a long wait for an answer, too, as the banks are terribly backlogged in dealing with these. |
| Adam and I just closed on our house about a month ago, and I have to say everything is changed. The lending industry is VERY particular now about who they lend to and how they lend. We had to put down a full 20%, and about a third of that was money from me as a "gift". They were uncomfortable with it being 1/3, even though my name was going on the house too.
Good luck; I wish I could offer some advice, but getting our loan, with 20% down, a great credit score and NO outstanding debt was 2 months of aggravation. Maybe they have eased the rules, and you will have a better time than we did. |
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