During the process of buying a home, you can expect to feel stress and frustration but the outcome is worth it all. To buy the house of your dreams, the best thing you can do is be prepared. This means making sure your credit is in good standing, that you have the right income, and most importantly, that you have a good down payment. The down payment is always a stretch. Even though you will find programs that require as little down as 3%, the more you can put down, the better interest rate you will secure and the more affordable the house payment. The following are just a few options on how you can secure the required down payment.
Bank Accounts – The more you can have in your checking and savings account the better. In fact, I suggest you set up a separate account specifically for your down payment money.
Gift Money – If your family donates money toward your down payment, you will need a gift letter as well that documents the gift.
CDs – Although you would be charged a penalty if you cash in the CD prior to maturity, this is another option for down payment.
Stock Options – Although it takes a while for stocks to add up, if you have any you have had stored away, it might be worth seeing how much they are worth.
Savings Bonds/Treasury Notes – Although cashing in early could mean losing on accumulated interest, it might be worthwhile for the down payment on your home.
Retirement Account – In most cases, 100% of the contribution to this type of account could be used.
401K – Again, since you contribute along with your employer, you might consider using some of your 401K as the down payment.
Real Estate – If you have recently sold another home, vacation home, or investment property, you could turn the money and use it for your new down payment.
As you can see, you have a number of options when it comes time to come up with the down payment. Therefore, before getting discouraged, take stock of what you have so you to determine various avenues for the money. You might be surprised to find that you can come up with a better down payment than first anticipated.