SAVING MONEY TO
PAY THE DOWN PAYMENT FOR YOUR HOME LOAN
Due to the recession that
has affected the financial world; you
will not get a loan for your house
without paying a down payment. If you
are considering buying a house now, then
you have to pay a large down payment to
be considered for the home loan.
You should first save
enough money for the down payment and
then start searching a house. Since good
deals are available in plenty these
days, you will be tempted to buy your
dream house now. The primary question to
be asked is: how will you get it?
The standard down payment
is about twenty percent of the price.
This rate will satisfy the security
needs of both the lender and the buyer.
At 20%, the buyer will think many times
before backing out from the agreement he
has signed with the lender.
So now the question is
how to get that 20%? Some people are
under the myth that the only way to save
that much money is by saving a
particular percentage of money each day,
each week or each month, till the sum of
your down payment is reached. For
several potential buyers this is a good
way though it takes a long time.
Though the method
mentioned above is the best way to do
it, you should know that there are other
options as well.
Given below are some tips
which will help you pay your down
Get it from your 401(k)
You can pull out your down payment money
from your 401(k) that has to be repaid
with interest over a five year period or
The greatest advantage of this method
is: your loan isn’t considered as a debt
by banks when they calculate the debt
qualifications for you. Therefore, your
loan application is not in jeopardy.
The disadvantage, which is a substantial
one is if you decide to quit your
present job to apply for another better
one, then you have to pay back the
entire loan at least ninety days in
advance. If you ignore this rule then
you will be in a big tax problem.
Therefore, take expert advice before you
choose this option.
Place your savings in to Investments
If you can wait for some time, then put
your savings in time deposits so that it
will earn some interest for you. Speak
to you financial adviser and invest your
savings in a safe place.
If you want to save till you reach the
amount required then here are a few tips
to reduce your expenses.
Make a list of all your purchases
including small items like candy bar.
Continue this daily for one month and
then, calculate where you can save.
Search for any expenditure that can be
avoided or make divisions for your
expenses and allocate a sum to each.
Giving up a small habit like having
Starbucks, which costs $4.50, will save
about $1620 a year. Contact
one of our helpful account
representatives to assist you in the
high risk merchant account or
offshore merchant account for a
high risk merchant.