Down Payment options, MortgageThe most common sources for a down payment are personal savings accounts and traditional investments, but there are several other places that can supply part or all of your down payment.

  • IRA Account: The federal government allows first-time homebuyers to use $10,000 in IRA funds for a down payment. For married couples who are first time buyers, this could provide up to $20,000 in down payment funds.
  • 401(k): If you have money in a company retirement fund, like a 401(k), you can usually borrow against your balance for a down payment. Be sure to ask about the rules regarding paying back the money and anything you may need to do to avoid tax penalties.
  • Gifts: Depending on the loan guidelines, you may be able to use monetary gifts from family or friends as part of your down payment. However, you will most likely be required to provide written proof that the funds were truly a “gift” and not a personal loan. Also, there are caps on how much gift money you can receive per year without increasing your tax obligations (consult your tax advisor for details).

Check with a financial advisor, tax accountant, and myself to learn more about how these options can impact your overall home financing plans and future goals.


One thought on “Finding Money In Surprising Places – Part 5 of Down Payment Options

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