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4 Smart Tips on Arranging Down Payment When You Buy a Home

Posted by Harold McCray on January 24, 2017

If buying a home to make the abode of your family is your dream, you can easily fulfill it with the help of lenders ready to do the financing part. However, all lenders make it a precondition for the borrowers to arrange at least 10-15% of the total value of the property. They do this to check the seriousness of the applicant and also to make sure that the borrower has his own money at stake in the transaction. Now, 10-15% of the value of the property turns out to be no small amount as homes have become pretty expensive these days. You must have this much amount in your bank amount to prove that you are a serious home buyer.

1. Start saving today

This is the best way to be ready to buy your first home when the lender asks you to pay the down payment upfront. A small saving every month goes a long way in making sure you are ready with the funds to pay the down payment. If the value of the property is $100000 and the bank asks 10% down payment, you should have at least $15000 to pay not only the down payment but also other related expenses like stamp duty and the fee of the attorney.

2. Ask for help from relatives and friends
If you have not been saving money for some time and suddenly make up your mind to buy a home, it is very difficult to arrange moment for down payment. In such a scenario, its your relatives and friends who can help you with money from their own pocket. Treat such help as a loan and return the money with interest to keep your image up right in front of your relatives.

3. Ask for a loan from the employer
Employers usually lend money to their employees at low interest to help them meet their genuine needs. They give a salary of these employees as security so they have no problems in finding these loans. If the money in your saving account is not enough, a small loan from the employer can work to arrange the down payment.

4. Get finance against securities
There are many private lenders providing secured loans to borrowers. You can give security in the form of jewelry or mutual funds to get money for down payment. You can also give your insurance policy as a security to get money.

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