This spring when you locate your dream house on the Columbus market, you’re going to get so excited, that all you will be able to picture is the excitement of moving in. You’ll be constantly daydreaming about how excited you will feel when you finally get the keys, and are shopping for the man cave supplies as well as fixtures for the kitchen. One of the next steps you will take is coming up with the down-payment, which can appear on your agenda at a time when you are already struggling a bit with various expenses. Here is a quick look at some of the strategies you can use to secure this cash as part of your earnest purchase of a new home. Even if you feel that you are getting a bit creative and pushing the envelope, we guarantee that the entire process is more than worth it.
Keeping your credit card balances low can take some discipline, but is one great way to reach your down-payment goal. When you are actively carrying a credit card balance, you are accumulating a high amount of interest charges. Paying down during monthly intervals can be a difficult tactic, but ultimately works for you to free up more of your income to produce the savings you now need to build.
You can also use Certificates of Deposit to gradually accumulate some fairly low-risk gains that could be good for a down-payment. As the investor, you can maximize the earning power of the CDs by closely studying the maturing dates they offer. If the interest rates are remaining low, the return is not always favorable, because you are on a more leveled-out profit plateau. If you can master the process of Laddering, you are able to lock in rates during a high time, and it keeps you from repeatedly low earnings.
Luckily for those who are needing to stow away money for a down-payment, there are several Special programs out there for home buyers that need extra help. Those from many walks of life have not fully recovered from the Recession, and professional entities such as Fannie Mae and Freddie Mac offer aid to the new homebuyer who may be struggling. These government-sponsored offices are in the business of packaging mortgages as investments, and there are also various community groups that you can call upon for down-payment assistance.
Some tax laws allow new buyers to use up to $10,000 in IRA funds for a down-payment if you’ve never owned a house. If you are both married and also first-time homebuyers, it is possible to pull funds from both of your retirements. Combined, you are allowed to pool up to $20,000 on a down-payment. Having the ability to do this with their partner as a strategy is well-worth the wait for some.
Borrowing from your 401k is another safe way to come up with money for your down-payment on a house. This is a bit different from an IRA-home related withdrawal, in which you’ll have to pay back any money that you take out of the company’s plan for you. In the long run, repayment can cost a bit more, since account contributions were made with money in a pre-tax state. The payback itself is made with dollars accrued after tax, and any interest payments will be going back into your 401k.
Gifts from family members are still one of the age-old forms of help that many who are in need of a down-payment utilize. Under tax law, you as the home-buyer are allowed gifts of several thousand dollars per year that can be received without any penalty. In most states, $12,000 is the threshold that you can receive as a gift, and it does not even need to be from a family member. Many who are wealthy gift this amount to new home-buyers so they can get a bit of a chance to enjoy the thanks while they are still living.
Auctioning off items that are now unwanted is another great way to ease the pain of a looming down-payment on a home. It may be anything from baseball cards on up to auto parts, and the advent of portals such as eBay have made it even easier for you to obtain a solid buyer. Just snap a picture and list the item, and you are making it available to a national (or international) audience. This will also help you in the constant battle to save space, and you’ll be happy to pick up a few extra bucks at the same time.