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5 Ways to Generate the Cash Needed for a Mortgage Loan Down Payment

5 Ways to Generate the Cash Needed for a Mortgage Loan Down Payment Posted on August 18, 2011Leave a comment

You will find that recent studies show a decline in the mortgage rates that are being placed on a vast majority of homes for sale all around the country. However, it is becoming harder and harder for home-buyers and especially those buying a home for the first time, to successfully save enough money to actually purchase a home for their family. The main reason for this is simply because credit unions, banks and other lending institutions are requiring as much as a 15% down payment before mortgage loans are approved. This can be literally impossible for individuals and families to come up with this large amount of money at one time.

If this is the type of situation that happens to describe the situation you are in, you will want to take a close look at the 5 steps listed below. These options can provide home-buyers with some of the best techniques for effectively building personal finances.

  1. Consider a second job – Saving money is always an easier undertaking when the amount of your monthly income is increased. Even though the employment rate has decreased over the past few years, there are still several different freelance jobs to be found in just about any small or large city.

  1. Consider using your 401(k) – There is a large amount of thought that should go into making this type of decision. This is an option that should only be considered when all other options have already been completely exhausted. One of the stipulations of withdrawing cash from a 401(k) fund is there must be a financial hardship that is proven before it will be approved. In a lot of situations this is the only option that provides families with the down payment on a mortgage loan.

  1. Investigate state programs that may be available – Although there are certain requirements that may need to be met, each state offer a varying range of local housing finance agencies that can provide assistance. To list a few of the services that they often provide would include subsidized home loans, grants and other types of programs. Some states even have programs that supply first and second home loans that are federally insured. This is an option that can be of great help, as the second mortgage gives families a way to pay the often large amount of money needed for the closing costs and down payment for the loan.

  1. Open a savings account – This is an option that can be beneficial regardless of the reason a person would like to improve their financial status. As the balance that is held in the account grows, so will the amount of cash that is received from interest earned on the account.

  1. See if you qualify for any FHA programs – Home-buyers are often able to obtain a mortgage loan quite a bit easier when the lender is insured by the FHA. Mortgages that are backed by the FHA can often be acquired by buyers that are qualified for only about 3.5 percent down.

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