Long & Foster Real Estate

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Sources For Your Down Payment

The obvious source of money for your down payment is either your savings or the proceeds from the sale of a home you already own. But there are some other not so obvious sources. In recent years, for example, "parent power" has taken some new twists for first-time buyers.

Home Equity Loan

Parents often have considerable equity built up in their own homes-and many are tapping that asset through home equity loans to make a gift to the youngsters. Ask your tax advisor for current information. Often lenders will require a "gift letter" to verify that parents don't expect repayment.

Shared Equity/Profit-Sharing

In return for providing a part of the down payment, the parents (or another investor) share in the "profit" or net equity of the house when the home owners eventually sell it.

Life Insurance

If you have built up a cash value on your life insurance policy over the years, you may be able to borrow from your insurance company up to the amount of this accumulated cash value. Often they will even ask a more favorable interest rate than would be asked for other types of loans.

Stocks and Bonds

If you feel the market doesn't favor selling your stocks or bonds now, you may be able to secure a bank loan using your portfolio as security.

Company Profit Sharing or Savings Plan

Look into the possibility of withdrawing what you have in your profit sharing or savings plan account or borrowing against it, if your company has these programs.

Closing Costs

The larger the down payment, the less money you need to borrow, which means a lower monthly payment. However, remember that in addition to your down payment and monthly payments, you will need money to pay for closing costs, moving, appliances, household setup, a reserve for family emergencies and other miscellaneous items. So don't plan to put your last penny down on the closing table. 

Mortgage Help

Call Mona Guynn of Prosperity Mortgage for Qualifying and closing cost estimates.  Telephone: 703-585-4414, email: mona.guynn@wellsfargo.com  

BUYER PACKAGE

INCLUDES:

1. Relevant current articles include economic forecasts, market conditions, etc.

2. Cost vs. Value Article

3. Virginia vs Maryland Article

4. Overview - The Buying Process

5. Potential Roadblocks to Successful Closings

6. Considerations in Preparing to Buy a House

7. Home Finder's Profile

8. Mortgage Checklist

9. Homeowner's Analysis

10. Home Inspection Radon Information

11. Home Warranty Information

12. Buyer Guarantees

Determine Housing Affordability

Sources for your Down Payment

Mortgage Calculators