Christopher Charbonnet

NMLS # 370097

985-888-1660

Chris@acemortgagela.com

Christopher Charbonnet Loan Originator

3 Quick Tips for A Mortgage Down Payment (No Matter Your Age!)

3 Quick Tips for A Mortgage Down Payment (No Matter Your Age!)

Congratulations: You’ve done the research and made the decision to begin your grown-up life in a new place; your own place.

You’ve got your credit, finances and life plans in order, and are about to embark upon a massive hunt for the perfect house.

But before you can actually take one of the most important steps toward adulthood, guess what: you’ve got to pony up thousands – if not tens of thousands – for a down payment.

The prospect of such an enormous financial investment can be just enough to turn off some from pursuing home purchasing altogether.

If you are just starting off in your career and don’t have a lot of savings yet, it may seem like it will be years until you gather up enough to put together a healthy down payment to even really consider buying a home.

Don’t let the down payment requirement deter you from such an important and beneficial financial move.

Here are some ways you can get a down payment together and pass one of the biggest hurdles to home-ownership.

Consider Additional Sources of Income

If you crunch the numbers based on your current salary and savings rate and find it will take years to get your down payment ready, your situation may seem dire and lead you to resign yourself to four or more years of renting.

What many don’t consider is finding a way to temporarily boost your stream of income. This could be in the form of a promotion and raise at your current job but don’t limit yourself! You can try picking up an actual second job, doing some freelance work, or even a series of one-shot gigs that add up over time (hello babysitting!)

There are more ways than you may realize to add extra cash flow to your life that can make a huge dent into – or even be the entirety of – your down payment.

Hit Up the Family

A generous parent or other family member is actually one of the most common ways young adults are able to eek out a down payment. Make sure that whatever amount your family member donates to your down payment is a no-strings-attached gift – and not a loan.

This is because the lender you work with on your mortgage doesn’t want you to be paying off a mortgage and a personal loan simultaneously. The lender will likely require proof that the money is a gift and not a loan by way of a legally binding document for your family member to sign.

An added tip: If you feel guilty asking Mom or Pops for the money, consider whether they asked their parents for help with their own down payment (if they had one). And, even if they didn’t have help, you don’t know if they asked and were rejected.

If you ask your parents after they were rejected at your age, you may be more likely to make headway with them as they seek to restore the karmic balance in their own children’s favor. Nothing ventured, nothing gained!

Reduce or Even Eliminate the Down Payment

When you see the price tag associated with a down payment, your first inclination may be to slump into the couch and let the weight of life’s problems overwhelm you into inaction. Sadly, you could be missing the obvious: Does the down payment really need to be this much?

It is generally accepted that down payments are 20 percent of the cost of a home. But did you know that some loans only require 10 percent, and some are even as low as 3 or 4 percent.

You need to look into alternative loan programs, and what you may need to do about your credit rating and financial situation to qualify for one of these special loans.

There are also down payment assistance programs offered through the government based on your income bracket, where you live and even your U.S. veteran status.

The takeaway lesson: Don’t take the initial down payment presented to you as set-in-stone. Like many things in life, there is more than one path to your goal!

Even More Assistance for Young Prospective Buyers

Are you a young adult considering home ownership and need some guidance? At Ace Mortgage we specialize in getting you the loan you need. Call us at (985)888-1660 to set up an appointment today!