Other Great Alternatives to a Traditional Mortgage

Coming up with a lump sum of money for your mortgage’s down payment can be difficult. That’s why it’s important to check if there are any other resources that you can tap into to come up with enough funds to do the payment. But where do you get such funds?

Check Your IRA

IRA or Individual Retirement Account is an investing tool that is earned as part of your retirement savings. The Traditional IRA are based on the taxpayer’s income, tax filing status and what his employer-sponsored retirement plan will cover. Individuals withdraw a total of $10,000 from their IRA just as long as they are under 59 ½ of age and doesn’t own any home within the previous two years. This amount can cover the cost of the down payment even without getting any early withdrawal fee of 10 percent. However, most brokers from cities like Atlanta would not advise anyone to get funds from their IRA account as it is only intended for a retirement.

Use Your 401(k)

Only individuals who are experiencing severe financial hardship can tap into their 401(k) to pay for their mortgage’s down payment. There are plans that allow home buyers to borrow a portion of the funds from their 401(k) to cover a down payment or even other expenses. However, just like the IRA, you should only tap into your 401(k) if you’ve already exhausted all your efforts.

State Programs

Local state housing finance agencies in certain states like Georgia can assist home buyers with their mortgage down payment. Although financial assistance may vary from every state, these agencies can help home buyers with their mortgage by providing grants and even subsidizing home loans. However, home buyers must first meet the qualifications before getting assistance. These are based on their credit history, income, and the home sales price.

Gifting Cash

This may seem rare to some, but often gifts from parents or other family members can be used as part of your down payment. Buy those gifts have to be documented as gifts. You must get a proof in writing from each of those donors that states that you are not obliged to pay them back.

Putting Some of Your Assets for Sale

Try to look through all your stuff to see if you might find anything to sell. Check those things that you aren’t really using anymore, like some spare flat screen TV or some fancy stereo system. Try to check how much they’re worth and see if you can still sell them. Make an inventory of all the items that you’re willing to sell and hold a garage sale. You may even want to put some rare collector’s item on eBay if you have any.