A down payment is an upfront payment that you make when you purchase a car, home and other expensive assets. It is paid by credit cards and checks etc. With a lot of expenses, saving for a down payment can be a daunting task.
For many lenders, the optimum amount for the down payment is 20%. You can get a big down payment if you follow the right steps. It is a thumb rule that the greater will be the down payment, the higher the chances are of acceptance.
Ways to get Down-payment:
There are many ways by which you can get the down payment for a loan. Some of them are as follow:
1. Look for government programs:
If you served in the armed force, then you can easily qualify for the VA loan, which is given by the U.S Department of Veteran Affairs. For first time home buyers, the government provides assistance programs. However, you can search for the criteria of individual programs offered by your country.
There are several down payment assistance programs offered by the state for first-time buyer. With the help of these programs, you can get direct need-based grants.
2. FHA Loans:
The federal housing administration offers loans for low to middle-range income people. They are insured. These loans have low-interest rates as compared to conventional ones. For qualifying this loan, you need a credit score above 500.
3. Retirement Funds:
Some retirements accounts let you borrow funds to buy home. You can get to know the requirements from the accountants. Furthermore, some accounts will lend you funds without causing any penalty.
4. Consider doing a part-time job:
From the past few years, lenders and banks have made the income verification necessary. It would help if you had a debt to income ratio of 43%. This will measure how much your monthly income is being given to pay off debts.
There some lenders that will accept low down payments but with high-interest rates. This will not prove to be beneficial for you. For this purpose, you can consider doing a part-time job to give a boost to your income.
5. Sell your belongings:
Most of people have a lot of expensive belongings such as gadgets and electronics etc. By selling your belongings, you can supplement your income, and this will help you with the down-payment.
6. Look for 100% financing:
The people who have is reliable and have an excellent credit history can qualify for a 100% loan. You can either look for a single mortgage or a second mortgage. For this purpose, you can talk with the broker for the best available option for you.
The above ways can help you with the down-payment process. There are a lot of loan programs out there with low-interest rates. You can choose which suits best with your needs.