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By Tara-Nicholle Nelson | Broker in San Francisco, CA

5 Secret Sources of Down Payment Money

Down payment: the mere utterance of the term strikes dread in the hearts of many a homebuyer-to-be. Coming up with a down payment often seems like an obstacle that must be overcome, as it is the biggest test of our ability to save money most of us will ever face and it’s a test that stands between us and our ability to become a homeowner.

I think it’s time to flip the script on how we think about down payments. What if we looked at them less as an obstacle, and more as an opportunity? Saving and collecting a down payment takes time, discipline and financial planning. It forces us into creating and practicing sound money management skills and habits, and into making clear choices about what’s important to us - things that will stand us in good stead throughout our tenure as home owners. To boot, the more money we have to put down, the more choice we have in terms of our purchase price range and the more control we have over our monthly payment.

All that said, down payments can be take years to save for, and some buyers are concerned they might miss a good market opportunity by continuing to wait. If you count yourself in that number, here are a handful of less-well known sources for boosting your down payment stockpile:

1. Your City.  Most of us remember the days of the zero-down loan, the federal home buyer tax credit era, and even have memories of when we could use tax credit funds toward our down payment and closing cost requirements. The keyword here is ‘memories’ - those days are long gone, as are the times when there were nationwide programs that allowed a home’s seller to ‘gift’ the buyer a down payment from the overall purchase price of the home.

Where have all the down payment assistance programs gone? Local, that’s where.

The best programs of this sort are now largely operated by local governments, primarily cities and counties. As such, the rules vary widely. Some are exclusively operated for buyers with low or moderate incomes. Others are dedicated to helping first-time home buyers, usually defined as someone who hasn’t owned a home in the past 3 years. Many of these programs have a limited pool of funds that may run out over the course of the fiscal or calendar year, and almost all of them require buyers to jump some major hoops in terms of:
  • bringing their own funds to the table
  • picking a home that meets certain minimum condition criteria and/or
  • completing a course of homeowner education classes

in order to qualify for the funds.  Some state and local programs in areas which were particularly hard hit by the recession also offer big-time bonuses for buyers who agree to purchase a bank-owned home or a property in a designated economic recovery zone.

To find these programs, just run a series of Google searches to find your city, county and state websites.  Most will have a link for Residents, Housing, Homebuyer Assistance or some similar category of resources. And here’s a hint - make sure you’re on a site that ends in .gov - scammers posing as governmental agencies abound.  Also, talk with your trusted, local real estate agent or mortgage broker; they often know the ins and outs of the local programs that can help a home buyer out.

2. Your Parents, Family and Friends.  Many more home buyers than you might think get by with a little help from their friends (and relatives). Most mortgage programs will allow for some portion of your down payment to come in the form of ‘gift money,’ which is exactly what it sounds like: money someone gives you to help you buy a home. Check in with your mortgage pro about how much of your down payment needs you can satisfy with gift money - guidelines varies widely based on how much of your own cash you have to put down and what loan programs you’re applying for.

While gift money sounds great, it’s far from a panacea to the problem of coming up with a down payment. Taking gift money from a relative may create relationship issues or come with emotional strings attached, something you should consider and evaluate before you even have conversations about it with your potential benefactors.

And gift money generally also comes with lender strings attached, as well. Namely, lenders almost always require that gift money be contributed along with a gift letter that states that the giver is a relative and that the money is a gift, not a loan. The lender may also require to see a bank account statement from the giver showing that the money was theirs to give - just to be sure they didn’t go out and get some sort of loan that they expect you to help them repay.

Most insiders think of gift money as large gifts exclusively allowable in the context of a familial relationship, but at least one program I know of allows any general well-wisher to contribute any amount to your cause, whether or not they are a relative. The FHA Bridal Registry program allows couples to open a down payment registry account with their lender, and to deposit checks into that account from anyone who wants to give any amount to help them become home owners. Talk to your FHA mortgage broker for more information on how to open such a registry account.

3. Your Employer.  Universities and the municipal agencies that employ first responders like police and fire personnel frequently make available down payment and other home buying assistance programs to their staffers. So do some large employers or even smaller companies who are seeking to lure top-level recruits, in the form of relocation assistance programs. Check in with your employers’ Human Resource division to explore whether any such assistance is available - and if you happen to find yourself a hot prospect on the job market, consider trying to negotiate relocation or down payment assistance into your offer package.

4. Your Income.  This is not about cutting out a cup of coffee here or there. Euro-style austerity measures are just too hard to keep up for the months or years it can take to save up a down payment. Rather, the idea is to get gut-level real with yourself about what’s really important to you. And if the answer is buying a home, then it’s time to go through your spending with a fine tooth comb and look for the leakage you can stop up  - cash you can redirect to your down payment savings.  

If you spend $20 a workday on oatmeal and coffee at breakfast and your takeout lunch, that’s $400 per month - almost $5000 a year, you can save by simply bringing these things from home (not to mention the health and other benefits you’ll gain). And those numbers are not inflated, if you work in a big city.  Nor is the $100/month cable bill, the $15 yoga class or the $2,000 vacation.

Fact is, you can have much of the enjoyment of these things for much, much less than you’re used to spending - at least while you’re in down payment-saving mode. Stream TV shows and movies online at Netflix, Hulu or Amazon - you can also find great workout videos on some of these channels for 10 percent of what you’d pay to go to a class! Bring the staycation back, or cut hotel costs by renting a private room or small apartment on a site like VRBO or Airbnb (you might be surprised at how nice the experience is if you stick with the vacation rentals that have rave reviews - I certainly was.)  

Redirecting the dollars you would normally spend - whether intentionally or on autopilot - for some of these big-ticket items back into your down payment savings account is like pressing fast forward on your home buying timeline. The key is to click out of money-spending autopilot and to transfer the saved money, asap, into a  separate down payment savings account - ideally one that is online, so you have to think hard and wait a few days before pulling money out.

5. Your Assets.  Some retirement accounts allow you to borrow against or pull out funds, penalty-free, to apply them toward your down payment on a home. Is it advisable for everyone, in every situation to deplete their 401K or IRA to plug that cash into a house?  Absolutely not. But there are situations in which it may make sense to get your down payment up to 20%, say, by borrowing a few thousand dollars from yourself.

If getting your down payment to the 20 percent mark by borrowing from your 401K gets your mortgage interest rate down and allows you to repay that cash to your own retirement account (vs. to your mortgage lender) with interest, you and your financial advisor might agree that this move is the right move for you.  Or not - this is a highly personal decision that must be made strategically, but some home buyers should at least explore whether their retirement accounts are a sensible source of some portion of their down payment funds.

And these aren’t the only assets that can help fund your down payment. I know a young family who has given themselves a complete financial makeover over the last few years by getting rid of unnecessary belongings and selling them at flea markets, yard sales and online. Don’t underestimate what reselling your stuff can yield; my own Mom has had a few four-figure yard sales over the years!

Do you have ‘stuff’ you don’t need or use that someone else would love? Consider liquidating it online or taking it to a consignment store, and using the cash to fluff your down payment savings.  Side benefit: you’ll have less to move when you’re ready to move into your new home!

Everyone:  What off-the-grid methods have you or your clients explored for coming up with down payment money?
 

P.S. - You should follow Trulia and Tara on Facebook!      

Comments

By Brian Petrelli,  Wed May 9 2012, 11:11
Great post. Colorado has several cities / counties that offer grant programs. We help homebuyers with them every month. They make a great difference. Thanks for the post.
By Margaret Rambo,  Wed May 9 2012, 11:36
The last tip works well in our recreation/retirement area. Many buyers sell that boat or motorhome
and use for down payment. Also first time homebuyers can really benefit from the down payment grant programs available locally. Thanks for post.
By Carlos Barron,  Wed May 9 2012, 12:16
Great post. Many of my clients have been able to use one or more of these sources for their down payments this year.
By Kawana Marshall,  Wed May 9 2012, 18:52
Excellent points! The down payment can be a deterrent for home buyers, especially first-time home buyers. For my younger buyers, whom are decades away from retiring, I often suggest withdrawing monies from their 401k or other retirement plans for their down payment. Even though this is a personal decision, the buyers must weight the options of either a home now or a "potentially" larger 401k at retirement.
By Frank Walsh,  Thu May 10 2012, 09:16
how about a va loan?
By Frank Walsh,  Thu May 10 2012, 09:17
how about a va loan
By Kylie Nichol Wyze,  Thu May 10 2012, 09:39
Here in Alaska a local bank has a $500 down program for home buyers; no income restrictions & no mortgage insurance for primary residences under $417,000.00....Most real estate professionals are clueless on this program. http://www.HomeFinderAlaska.com
By Adrian Provost,  Thu May 10 2012, 10:02
Great Post! http://www.AdrianProvost.com
By Helen Oliveri,  Thu May 10 2012, 10:17
Great tips Tara.
By Penny Post,  Thu May 10 2012, 10:28
Great post, many cities in the Greater Kansas City area have grants and other programs to assist first time buyers and first responders.
By LAURA MASER,  Thu May 10 2012, 10:28
In Greenville, North Carolina, we have a unique downpayment assistance program offered through the City of Greenville Community Development Department Housing Division. In addition, our area also has a local bank that offers a $500 down program for qualified buyers. It's worth talking with a real estate professional to learn more about these programs!
By Sabforme,  Thu May 10 2012, 10:33
"Is it advisable for everyone, in every situation to deplete their 401K or IRA to plug that cash into a house?" The answer is not "absolutely not" , the answer is ABSOLUTELY!!!! 401ks and IRAs in this day and age are horrible and may not always be there. Apply all or some of that in a great investment property IMMEDIATELY!!!!
By April Kell,  Thu May 10 2012, 10:53
I am attempting to purchase a home in Rosamond, Lancaster, or Palmdale California. (Kern County/LA County). I could not for the life of me find any down payment assistance programs/grants for these areas. Anyone know of a website or tool I can utilize to make my searhc easier?? Thanks,
By Barbara,  Thu May 10 2012, 11:26
Can I just tell you as a seller in this market I am passing this advise on to the current buyers. Buyers today act like the seller is their great Aunt Berta that is going to give them the money for settlement and in case something breaks down the road. I have bought 3 houses in my life and never once got a "seller assist" I had to beg relatives & drain my kids savings to make the $$down & settlement costs. And my mortgage rates were 10.75% not the 3 to 5% of today. I haven't had one offer that didn't include a seller assist. And if the roof is fine. Why should I give the buyer a credit for an unknown life time of the roof? At this point the buyer and the realtor are making more money on the deal than me. If I could afford to give my house away, I would find someone I like, not a random stranger. The buyers today are spoiled brats!!!
By Ed 'action' Jackson,  Thu May 10 2012, 11:29
@ April Kell there are quite a few programs available to you. One i like to use for my clients is called chadap (not sure of the spelling but thats how you pronouce it) it allows you to purchase with as little as a half of percent down. Ask your realtor or loan officer about it.
By Bret,  Thu May 10 2012, 11:36
Or just rent.
By Janice Carter-Lovejoy,  Thu May 10 2012, 11:37
Google to find a local bank that participates in the Federal Home Loan Grant program.
By Fred Strickroot,  Thu May 10 2012, 11:38
The HomeNet "YOU" Team loves great tips to making buying a home a delight not a fright!
By Alvaanita,  Thu May 10 2012, 11:41
True, there are many down payment assistance programs available...if you're a first-time home buyer. Because of a "technicality" I'm not and can't find any help. Years ago my mom added my name to the title for her home after she & her sibs had to go through probate when my grandfather died. His was the only name on the title to his house. So, to avoid this from happening with her home my name was added. Although I live with her I never received any tax benefits & was never attached to her mortgage loan. But everyone I've spoken to says I don't qualify as a first-time home buyer. I'm disabled, but still can't get assistance with my down payment. I plan to move to Chicago. As it stands now I'll have to use my entire savings as well as get a gift from my dad which, of course, I was hoping to avoid. It's quite disheartening.
By David Barr,  Thu May 10 2012, 11:43
If your down payment is causing you nightmares or worse, then what kind of money will you have to make repairs or if there is a major illness? Not eveyone that wants a house should have one, which is the mindset that got us into the housing mess in the first place.
By Amy Mihalevich,  Thu May 10 2012, 11:50
I've found that I've been able to scrape together down payment money by looking at the things that I don't want to drag with me on another move. Garage sales, craigslist, ebay are all great tools to clear out some stuff that can generate money. Having the incentive to pare down because of a move makes it easier to part with some things that I may otherwise have held onto. When getting sentimental about my old stuff I just think that someone out there might really be able to use it, and is willing to pay for it!
By griswald007,  Thu May 10 2012, 11:58
Thats why there are so many foreclosures today is all the creative financing .........if you can afford it buy it if not forget it!!!! Theres nothing wrong with renting until you can save a downpayment.......remember the realtor wants to sell the house for the commission they are not your best friend.............same for the finance co.........when you start taking from your 401K your living beyond your means...........THINK before you buy...........
By Justin Ruzicka (239) 699-0517,  Thu May 10 2012, 11:58
Great Post. Really speaks to what we all know is going on in Lending...LARGE DOWN PAYMENTS for years to come. Here is another Blog about Saving for that: http://wp.me/p1MLJl-aR
By Cornelius,  Thu May 10 2012, 11:59
My bookie Vinny.
By John Crowe,  Thu May 10 2012, 12:02
I enjoyed this. One thing I see more and more often are smaller down payments as part of a broader cash management strategy: Rates are so low, buyers are borrowing as much as they can and are using the cash to invest elsewhere.
By Jacqueline Peraza,  Thu May 10 2012, 12:09
Tara, this list is fabulous! My favorite: The Bridal Registry Account!
By Leila S. Mortaz,  Thu May 10 2012, 12:22
We have a program with available funds to help with down payment if you have buyers with 620 plus fico and documented job and income.
By Bryon Self,  Thu May 10 2012, 12:23
I agree ... see what your city/county has to offer. Most mortage brokers/Realtors know of the down payment assistance propgrams. FHA has the $100 down program as well.

http://www.MyDenverHomeAgent.com
By Kathleen Decicco,  Thu May 10 2012, 12:30
Well, I am REALLY GLAD to see an article giving hints to homebuyers as to where they can raise money for closing costs and down payment! I have my home on the market, and it seems that buyers expect sellers to not only take a hit on the selling price, but to also "contribute" to their closing, to the tune of 13-14K! If I wanted to subsidize someone, it would be my own child, not complete strangers! And the real estate "buyer brokers" working with these people act like it's perfectly all right to expect this! Can someone please explain to me why its OK to try to purchase a $360,000 home for less out of pocket cash than one would need to lease a Chevy Cruze? Is'nt this how the whole real estate mess got started?
By Sharon McAuliffe,  Thu May 10 2012, 12:35
You mention FHA, which offers loans to buyers of a primary residence for just 3% down. A key detail for buyers to be aware of is that they much keep their credit scores clean. FHA requires a minimum 640 credit score. It won't matter how large your downpayment is, or how rich your co-signing uncle is, if you don't have the score, no loan for you!
By Too Many Idiots In The World,  Thu May 10 2012, 12:52
Uh..what is so secret about these?
By Too Many Idiots In The World,  Thu May 10 2012, 12:53
Also if you are borrowing money from Mommy and Daddy for a house you have no business being a home owner.
By Danitamagsam,  Thu May 10 2012, 12:53
If you don't pay 20%, expect to pay PMI.....total waste of money. I agree, buying is not for everyone. Why throw $$$$ away on PMI. And realtors& mortgage people are not always lookongout for you, they work on commission
By Brian Hertzog,  Thu May 10 2012, 13:01
This is rather comical to me, mainly because my wife and I are going through the same thing --- putting together a small down payment of approx 5% for a modest house in central PA. Loaned cash is so cheap right now... why would I want to spend my own earnest cash when I can get it for 3.75%?! Even with 20% down, you're still financing 80%! FHA is the last bastion of hope so long as you are below the limits in your geography... our prospective town is capped around $383k for example. Or if you are low-income you may even qualify for a 0% down USDA loan. Anything over 417k is a jumbo loan and will not only require conventional financing -- but it will require 10% down on a house, not the typical 5% minimum.

Now, regarding a Seller's Assist, I don't know why everyone is complaining so much.... the buyer should be grossing up the offer to include the assist. You shouldn't be expected to just take a 10-20k haircut for the sake of it. But this whole "subsidizing a stranger" is ridiculous. Numbers are numbers.... as long as you net what you need to net, that's all that should matter to you. The buyer is financing out those costs anyway, it's not like they're free!! Again, cash is cheap, why spend anything more out of pocket than needed.....
By Kathleen Decicco,  Thu May 10 2012, 13:14
Brian, your idea of "grossing up the offer" is good, as long as the property will APPRAISE for the pumped up sales price. However, these buyers don't want to up the price, they want to lowball....
By Pauliepauls,  Thu May 10 2012, 13:24
I agree with Brian Hetzog. Sellers should stop complaining about seller assist. Sellers, that is the market you are in today...one where you would be asked to provide a percentage of the sales price to the buyer towards closing costs. Your agent should let you be aware of this and factor this cost among others into your sales price. In the final analysis, you as the seller in the negotiation process could decide that you do not wish to do this. You have the power to say no.
By Earl Satahoo,  Thu May 10 2012, 13:27
Hello Tara,
Great Post. I suggest that if someone is getting a gift in the form of cash that they receive it two months before going to contract. This way they avoid the gift letter as the banks are asking for the donors statement to show the withdrawal. Most donors do not want to divulge this personal information and they cannot blot out the balance or account number on the statement as this would invalidate the statement.
Of course you know why two months before contract- to season the funds.
By Sheri Bueltel,  Thu May 10 2012, 13:28
If you are looking for a way to pay less than 20% down and not have to pay mortgage insurance, then try homepath.com. It is a website for Fannie Mae. Fannie Mae owns the foreclosed homes and gives you the mortgage. The interest rate (for me anyway) is higher than FHA, but they do not require money down. And since you are getting a mortgage from Fannie Mae and buying a house from them, they do not require an appraisal. That saves cash upfront and cancels one of the problems that can kill a deal.
By Sheri Bueltel,  Thu May 10 2012, 13:29
Sorry, they don't require much money down. I had to pay 5%.
By Pauliepauls,  Thu May 10 2012, 13:30
@Kathleen Decicco I understand how you are feeling. We experienced these low ball offers when we were selling our car. Now granted a car is not a home. You will just find that people are who they are and you just politely decline the offers from the those 'buyers.' Those individuals may think that they are serious and looking out for their own interests but are in fact playing games and want to bite off more than they can chew.
By Oldcountrybooy,  Thu May 10 2012, 13:36
The fact of the matter is this:
The Banks are crooks.
Agents should stop asking for 3% or higher commission for 2hrs of work
The whole process just does not work for most Americans.
Most Americans can't save due to high rents and other life expenses (kids..)
For example in southern CA the avg home goes for $475k.
The avg incomes is $45k-$65k - people who make this can't afford a home.
The 45 to 60 age generation have very few parents with funds
People 65 and older are force to work when they should be retired
........ these are the simple truth

Here's some ideas:
..Regulate how much a home prices can go up
..Remove all the extra cost (escrow) the Banks should be covering these its their money and home
..Get the government to sponsor loans for good credit and hard working Americans (at least 10% down)
..Regulate Investors who buy up property from the banks (banks provide favors to them)
..Protect home buyers from the Banks or Loan Services
..Allow buyers to put the down payment into the loan so more buyers can qualify ( require $5k extra payment per year until the down payment is paid off)

My idea's are just wishful thinking..... but we must start somewhere, right?
By Diana Daily,  Thu May 10 2012, 14:07
Dear Oldcountrybooy.... I can't get past your comment regarding Realtors charging 3% for 2 hours work... Please let me in on the secret of representing a party of a Real Estate Transaction in just 2 hours. o_O
By Lydia Kray,  Thu May 10 2012, 14:07
In California, we do have the CHDAP program down payment assistance program. As long as you meet moderate income guide lines you've got your down payment!!!!
Hey first time buyers in So Cal!!! Call me about this program!
By Guy Francois,  Thu May 10 2012, 14:09
There is a program by some local government called NSP. It is for buying a foreclosure. It offers 10-15% down in the form of a grant that doesnt need to be repaid as long you stay in the property for some determined years. I got my first house like that in 2009. http://www.iwillteachyoutosave.com
By Lisa,  Thu May 10 2012, 14:22
Yeah this is great for first time home buyers, or low income. What about the rest of us that ended up having to relocate due to job and lost all of the money on our house. My neighbors short saled their house to the tune of 70K and walk away free of having to pay any of that back. Everything else in our price range of the neighborhood is a foreclosure which is tanking my house's value. Meanwhile I have to sell mine and will lost almost all of the 20% that I put down. No one is going to pay me back. I am going to have to work and scrimp and save again to get a house. On second thought, maybe we just won't buy one. They just aren't the great investment they used to be, especially if you end up having to move due to unexpected job loss or relocation.
By Lisasan3,  Thu May 10 2012, 14:49
Can you (TRULIA) also do a feature about FSBO and lease w/buy options? How have these strategies changed in the new housing market of today? Are they still viable options for both buyer and seller? I love your topics and information! They are so helpful to me. Thanks! Keep up the good work!I am a renter. Can you also talk about renter's equity. Is there such a thing? Thanks again.
By Anna Toyna,  Thu May 10 2012, 15:11
I just used the money my late husband left in his insurance policy. Granted it's a one time thing, but it worked this one time.
By Sukh Sagar,  Thu May 10 2012, 15:35
Oldcountrybooy you have some merits in your arguments but there are cheaper properties too.
So move to cheaper locations.I may be wrong but I think your chance of success is more when you start small and then move on to bigger and better from there.
By Russell Grether,  Thu May 10 2012, 15:54
Once again another great post! Thanks!
http://www.malibuluxuryrealty.com
By Hans Bruhner,  Thu May 10 2012, 20:14
That is a good post for sure. I do USDA loans in some rural parts of California with no money down and we can also do an FHA loan at 3.5% down but we get a 2nd mortgage for 3% so the buyer only has to come up with 1/2% down. That is $1,500 on a $300,000 home. Just dont forget to http://www.AskTheLoanMan.com
By Charles,  Thu May 10 2012, 20:51
I disagree with some of the comments about if your having a hard time gathering a down payment you cant afford a home. Not true with the state of the current real estate market i have found several homes where the payment amd insurance would actually be $400 a month or so less than my rent. If you are married and have boys and girls go price a three bedroom house for rent.
By Ellen Derby,  Thu May 10 2012, 20:57
you can always cash in your saving bonds you received as a baby or upon graduation... if they have matured they can add $50 here, $100 there. It's not a lot but if you do a bunch of little things it adds up! We sold a bunch of stuff on Ebay and made around $1000.

And as was mentioned in the article: cut back on your everyday spending! Buy kids clothes from consignment or swap with friends and family. Wear your own old clothes instead of going on a spending spree for the new season. here's one: Quit smoking! $5 or more a day adds up and you'll live longer to enjoy your new home! Find ways to reduce the over all cost of certain things. Think green: recycle, reuse, repurpose, reduce, get creative, buy used, make-do, fix things, wear a sweater/ take off a layer, walk /ride your bike, etc.

It's hard to save if you already live close to the bone. But then there are programs for low income people!
By Lisa,  Fri May 11 2012, 05:21
Down Payment? We have our home up for sale in a town that NEVER had a housing boom. We have 40,000 in equity which we will loose based on the listed price and then all of the other fees. We refinanced in 2008 to a 15 yr mortgage with a much lower interest rate so we would be in better shape. Where will our buyer assistance come from?
By Troy Beck,  Fri May 11 2012, 05:29
You can also try https://www.naca.com
By Jim Larabel,  Fri May 11 2012, 07:32
Good Information to pass on to my customers.
By Jim Larabel,  Fri May 11 2012, 07:32
All good information ..
By Sagarmatha,  Fri May 11 2012, 08:36
By: Sagarmatha
Any Home Buyers Assistance Programs in the greater Nashville area? We would be first-time home buyers here in the US, but previously owned a home in Canada within the last 3 years? I have a fairly good position here in US, and slowly building US credit scores. I am aware of FHA loans, but any way to find help even with this percentage of down payment?
By Clay.michele,  Fri May 11 2012, 09:03
Look into NACA.com. They have wonderful programs that assist in purchasing your home and also if you are in jeopardy of losing your home. No down payment. No closing costs. Lowest apr!
By Househunter123,  Fri May 11 2012, 13:08
Barbara - THANKS and THANKS again for saying what many of us who have done this for years are thinking about the buyers today. Before we finally sold our house, we fired six realtors who despite telling us that they would check the credit of their buyers - they apparently were willing to waste their time and ours. Just like what I told the folks trying to pull this crap - if you can find me a house just like this one and at those prices under those terms and conditions - you have a deal. Otherwise, take a hike.

If people cannot afford to buy a house - then do not attempt to beg and plead with those of us who have homes and spent time and a great deal of money maintaining them as well as renovating them. Do what we used to do when it came time to buy a house - WE SAVED OUR MONEY! Realtors stop wasting your time and ours trying to bait us with people who do not have money. Let's get back to reality and stop with the wishing and praying that things will be different or change. Barbara, I am with you. Why in the world do these STRANGERS think we owe them a house? We have family members that we can gift our assets to if we could afford to gift the house. This is why we are selling the property. Like duh.......
By Househunter123,  Fri May 11 2012, 13:12
Given what some of the sellers online are saying - I would like to see more real estate transactions take place without realtors. It looks like the realtor's new job is to find money for these folks to buy real estate. So maybe the buyers should be paying the real estate commission instead of the sellers. Might make people more responsible if negotiations started out with the buyers carrying more of the weight on the purchase.
By Bauhaus,  Fri May 11 2012, 16:57
@Barbara & Househunter: I don't envy either of you for having to sell houses in the current housing environment. The downturn being what it was - and still remains - has certainly turned the market against sellers. At the same time, it shouldn't be lost on you that NOTHING changes without BUYERS stepping into the market to begin to reverse the tide. And like it or not, the savvy buyer will understand that even though SOME conditions are more favorable (rates, for example), there remains considerable risk for buyers who are stepping in now, including uncertainty about when prices will truly be stabilized, and how strong the economic recovery will be (if it indeed remains on its current course). If buyers are being prudent they'll make certain to drive the best deal possible to hedge their own risk. Part of that deal may be to ask for closing funds - which would be something entirely apart from "begging", or acting like strangers who think you "owe them a house". If that's what buyers in the local market are getting, then they'd be placing themselves at a disadvantage to NOT ask. In this environment it makes sense for buyers to hold onto as much of a cash reserve as they can as a buffer for the uncertainty that remains regarding the economy.

Hopefully, I'll be making an offer on a house shortly, and the offer will reflect a sober view of the challenges of the property, as well as overall market and economic conditions - which are things that become MY problem once I take on ownership of the house. Any strong opinion any seller may have about me or any buyer matters not - there will only be a deal when I feel comfortable with the risk I'm assuming as the new owner. As for the specific property I'm looking at, the market seems to agree with me, as there have been price reductions over a long period that tell me to proceed with caution in making an offer.

Also, for new buyers - please fully consider as you're raising funds that there won't be a landlord to call for things like a roof leak, broken furnace, broken stack pipe, fallen ceiling, leaking heat radiator, critters in the attic space - all of which I've experienced as a renter (sometimes more than once) - and I've seen the amount of labor ($$$) involved in fixing these. It really is about more than just having the down payment.
By Gerta Pierre,  Sat May 12 2012, 09:01
I would like to read your article on (buying house on auction) .What are the pro & con.

Thanks
By Osiris Carcamo,  Sat May 12 2012, 15:09
I am taking real estate classes at the moment and has helped me have more respect for realtors. It is a job like any other and they deserve a salary, they really work for it. They have to constantly be updating their knowledge and computational skills. My plan is not to become a realtor but to learn to become a knowledgeable investor. I am a home owner, a real owner...I have been debt free for the last 6 years! It is interesting how some people don't give you good advices on how to pay off your home. It is not because they don't want to to tell you, it is that they don't know how. Yep, selling things, spending less, paying less are all good strategies to save. But the best way to save is to cut off all those credit cards with high interest rates...that is a key element. Own a credit card that earns and pay it off at the end of each month. Don't carry a balance. Buy your movie tickets at costco and by the way the American Express from costco its awesome. I got $800 back last year, so I don't even have to pay membership! I try to pay everything with that card even my phone bill. Oh that is another savings, eliminate you house phone if you still have one. You have your cell, Ipod, I pad, internet, magic jack, why do you need a phone for? 911 calls? Don't worry just keep all your house phones plugged in the house, even if you disconnect the service, the 911 will still be available, it is mandatory service in all the states!!! I should be a financial adviser! Don't forget to help others whenever possible, God will return in big quantities and you will never struggle with money! Mayan Queen in California . Good Post Tara!
By Osiris Carcamo,  Sat May 12 2012, 15:14
One more thing, help small businesses. Enjoy life, visit farmer's markets, have fun.
By Jim Olive,  Sat May 12 2012, 16:39
Good advice Osiris. I can't tell you how much money I've gotten from Discover over the last 25 years that i've carried their card. I put everything on it, groceries, gas, utilities, anything that will take the card. Then I pay it off in full every month. Never pay a penny in interest, but collect at least a thousand dollars every year in "cashback bonus". Another great saving technique...go "clubbing" less. A night out at clubs costs a bloody fortune! Stay home and watch a movie once in awhile and that'll really rack up some savings. Most important...ONLY BUY WHAT YOU CAN AFFORD TO PAY FOR! The credit card companies have convinced us to use credit to get what we want. What that really does is get THEM what THEY want...your money!!!
By Hidden Assets,  Sun May 13 2012, 09:25
My employer allowed employees to cash in unused personal or annual leave. I was a workaholic for 3 decades. The last few years I worked, I cashed in leave and banked it. When I retired, I had a month and a half of leave I had not used and two other substantial savings accounts. I was able to pay cash for a 4 bedroom house that was heading into foreclosure 14 years ago and had money left over for other expenses. Many people earn-a-day and use-a-day or save for vacations but if you seldom take days off, check to see if you can convert some of your leave into a down payment or even purchase a house with cash. Many of my co-workers said I would regret working so many hours but it paid off for me. I estimated I worked a total of 3 years of unpaid overtime during my 30 year career...... I suppose I lost that but I am thankful I worked and saved my leave rather than spending thousands every year on vacations.
By Katherine,  Sun May 13 2012, 20:26
It took me 7 years to pay off a loan of $119,500 - which was everything, closing cost real estate fees everything. The first year I made the min payment of $856.00 and at the end of the year I noticed for all the money I paid on my fixed loan the pricipal wasn't taking any kind of a dip at all. The second year I paid the payment but when ever I could I paid extra against the principal . I also allowed for them to pay the taxes and insurance, this took the heat off of me not only in remembering the yearly fees but saved me time and my sanity and didn't cost extra.


The third year I was getting used to saving and making every penny shot for mercy. So my goal was to double my principal payments and if that meant I got a lawn mowing job (which is about a $100 for 5 hours work or more!) then so be it. As I crunched up on my spending I found new free avenues of doing things and at the end of the year was thrilled to finally see a change in the bottom line.

This spurred me on and I double and trippled my payments in the following year. It is important to know that you want to make your regular payment seperate from your principal payments. If you don't the bank will hold the money that is extra towards your payment and you will always be ahead of your payment but your principal will not get paid.

Another thing that helped me is that I allowed the bank to withdraw my full payment on the 1st of the month directly from my checking account, once this was done I could concentrate during the month on paying the principal payment which stagered.

My local casino has been giving me $11 a week, free and clear for 5 years now. I use to take this $11 to the bank weekly and pay it on my principal. It doesn't matter how often you pay or the amount you pay only that you do pay if you want to see that bottom line reduced. I also paid different sums througfhout the month that I could safely afford to make. Birthday presents, extra work, etc. all went to the principal.

Paying on the principal will not reduce your interest and it won't reduce your payment. Paying on the principal means that amount will never see interest and that in itself is a very good feeling.
By Sonia,  Mon May 14 2012, 07:30
Interesting comments representing everyone involved. I have bought more that one house in my lifetime and I was never lucky ot get any assistance. My first house I had to pull from my pocket $20,000 dollars for down payment and still PMI for about 9 years. The second house was purchased 11 years after in another state and the same thing happened, I had to pay from my pocket $20,000 in down payment again. The seller is looking to make a record profit, the realtor is looking to make as much commission as possible, and the buyer has to pay for every sheet of paper the bank uses. The banks are the biggest culprits, they want you to pay insurance for their money, their house and there is no one who is looking out for the interest of the buyer. They cover up every fault, even the engineer that we pay to ensure that everything is OK they screw up too. Nine out of ten time, buyers find out about all the problems immediately after the wrarranty expire and we are left to fix everything that they all know was wrong but no one was honest enough to say something because they are only looking at the couple dollars coming in their pockets. What a disgrace. but guess what there is still a GOD in Heaven who is going to judge us all.
By Dennis Barillo,  Mon May 14 2012, 10:26
Isn't there a way you can collect your dividens from your life insurance policy? I used to know the formula but it's been a while. I think you had to have it for 10 yrs. and you can collect 7yrs. of it by just calling your insurance agent and telling them you want your dividens..now.
By Pamela Shemet,  Mon May 14 2012, 12:48
Good tips
By Juana Alvarado,  Fri May 25 2012, 12:04
Dear Oldcountrybooy,
I started selling real estate later in life. Working 7 days a week and 12 to 20 hours a day is not new to me. I can tell you that I have never worked in a group of people that was more dedicated, caring, well informed about the business and hardworking. In an economy that has knocked the wind out of most businesses, real estate agents continue to work hard; often spending more money than they earn. The amount of time, energy, and resources we have to invest to stay in this business is staggering. I don't know what you do for a living sir; but I do hope you never have to listen to people tell you that you're not worth what you make.
By Kenshawwjeanne,  Fri Oct 19 2012, 06:45
All lender posts on this site are fraud posts.They are extremely fake.Some may contact you through your email already disclosed on this site in fake pretense of given out debt help,grants,checks,etc,& require you to pay some token. I lost over $2k dollars with one on that site right here in the US an EUROPE and since then I learnt my lessons...if I where you I would get my
post deleted from that site immediately,because any chance and opportunity given to these guys,they would hold onto it,and suck off your hand earned money..Such token fees may not be illegal, dealing with a local lender,one on one from your locality.but those contacting you through this site,are SCAMS. Only loosing hope at all,I was referred by a cousin to a Christan Loan Officer,that ONLY charged me 5% interest plus a token back end procedural requirements to get my business loan $20000 approved and transferred to me..for more tips of detecting scam lender & how I finally got my debt freedom through a liable source,email me via. " kenshawwjeanne@gmail.com "
By abenakimorningdove,  Sat Apr 27 2013, 04:54
I want to buy a house in Milton mills nh, on 15.9 acers with a fixer upper 2br 1bath home and a garge
they are asking 110,000.00 $ for it. I would need at least 160,000.00 $ for a loan . I am on ssi and my boyfriend works .so he can help with the mortg. and ect. but I don't have any money for the closing and or the down payment is there any help out there for my first home.
abenakimorningdove@yahoo.com
By Voices Member,  Fri Aug 2 2013, 13:09
I definitely need to try more of these so that I can get a Edmonton windshield replacement! I love your tips!

David | http://www.all-westglass.com/edmonton.html
By Voices Member,  Fri Aug 2 2013, 13:11
I love trying these tips because they always work! They are so perfect!

David | http://www.greatcanadian.ca/services/windows-and-doors
By Voices Member,  Thu Sep 12 2013, 14:58
Down payment can be a tricky thing but you have to look closely for the pennies between the cusion! :)

David | http://www.albertawaterservice.com/en/septic_services.html
By bragga101,  Fri Nov 8 2013, 08:29
I live in the Fort Lauderdale area got thrown out by my family with a six year old and a four month old looking to purchase a home but don't have the down payment is there a programme that could help me so desperate
By Charles King,  Sat Feb 1 2014, 06:39
Very valuable tips. I'm in the process of hiuse hunting for now. Going to buy by the end of this year or early next year. I will start exploring what resources are available in my area. Lovely houses in the Exeter and Amity township areas. Cheap too whwn compared to Fleetwood or Chester county.
By tanice9454,  Tue Apr 1 2014, 16:09
I'm a single woman - with a steady job. I looked at my rent vs mortgage and would come out better purchasing a home. But the problem is downpayment. Does anyone know of help in the Atlanta, GA area for assistance.
By jen_chandler1012,  Mon Apr 28 2014, 07:34
i am a single parent moving back to houston this summer and i want to buy a home. can anyone tell me or help with any suggestions on a grant or loan for a first time homebuyer in houstonTexas. i dont have the 20% but i have at least 7% of the down payment. i need help with the rest. thanks i appreciate it.
By Summer Davis,  Thu May 8 2014, 05:10
In NC and SC there is a large amount of Rural area that is eligible for 100% financing. I love using the USDA program for borrower's that qualify. Also, VA has a fantastic program with no money down. As do many state's, NC and SC have State Housing program's with down payment assistance of up to 3%. Along with the DPA, you can save up to $2000 on your income tax! There are program's available for credit responsible borrower's. A word of caution...please be careful if you are considering a credit repair company. I have yet to see one that is legit. A good LO can and will assist you with minor credit issues.
By bmjackson5,  Wed May 28 2014, 08:22
Wow, really? Tapping into your retirement account for anything but saaay RETIREMENT is not a wise decision. There are so many reasons why. Look them up and educate yourself. Besides, if you can afford to repay your retirement account, as will be required, then you can afford to save $ month after month and come up with the down payment on your own.
By Anita Simoni,  Sun Jun 1 2014, 09:01
Wow! I have reviewed all the posts and comments above and I must say many of you are not realistic. I make $130k a year, don't spend anything frivolous (coffee, bagels, weekends or travel) and I live in an area where a 2/bd 1ba 800 sqfoot home with no garage and a tiny 10x10 yard is starting at $500k and will most likely be bid over $550k. How do you come up with 20% down when your rent for your 2bd 1ba apt is $1500 per month, gas is almost $5 per gallon, a gallon of milk is $6.50, chicken is $6.99 per pound AND I pay 40% of my taxes to the government for all the subsidized programs to help the "less fortunate"!! It's ridiculous! I have an 820 credit rating and $30k saved and I can't afford anything in the entire county where I live (it's in Cali of course). Stop complaining everyone when your buying houses for $110k - you can't buy a trailer where I live for that.
By Jakarczynski,  Mon Jun 2 2014, 20:03
seems to me that if the CITIES WANTED TAX REVENUE... THEY WOULD GET A LITTLE MORE PRO-ACTIVE....BUT I GUESS BIG LUNCHES & DINNERS WIN OUT AGAIN !!!!!
By fred.kalt,  Mon Jul 7 2014, 13:59
Anybody know of resources in Anchorage Alaska?

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