Purchasing a home is among the most significant investments in a person’s life, and lenders need to know that you could afford it before giving you a loan. Although there are home loans that require little to no down payment, you most probably need to bring 20% down payment for most home loans or find a lender who could offer a 1% down payment home loan in Salt Lake City. If this isn’t possible, below are some options you could explore.
See If Your Employer Could Help You
Employers sometimes offer help through a benefits package that includes assistance for home buying. You might be able to obtain cash for a down payment via a grant, which you’ll need to repay or an interest-free loan. Some even offer employees a matched-savings program in which you and your employer contribute money that you could use for your closing costs or down payment.
Maybe Your Family Could Help
Most lenders allow borrowers to use gift money, provided that they meet some basic requirements. One, only someone related to you could gift you money, except if you are engaged, and the money will come from your future spouse so that you could buy a family home. Two, the money can’t be a loan from your family, and you need to present documentation to support this.
Check if there are Down Payment Assistance Programs in Your Area
Nonprofit organizations and state agencies typically offer these types of programs, and these work similarly to employer programs. However, take note that you might have to satisfy a certain income requirement or could only purchase property in a particular area to be eligible for these programs.
Consider Dipping Into Your Retirement Account
You could withdraw as much as $100,000 from your IRA account to fund your down payment without being penalized for early withdrawal if you are under 59 ½ years old. But you still have to pay income tax on that money. This would also reduce your retirement savings so think twice before tapping into you IRA.
You don’t have to spend years on end just to save money for your down payment. Although the above mentioned options might not apply to every borrower, it doesn’t hurt to try either. Otherwise, keep your eye out for a no or only one percent down payment home loan, advises a lender in Salt Lake City.