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Down Payment Options for Buying a New Home
by Gabriel Traverso
CMR Columnist
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Many would-be homeowners who would otherwise qualify for a new home loan can't because they don't have the down payment. Saving up for a down payment on a new home can seem impossible. After all, you probably have car payments to make, maybe a student loan to repay, and let's not forget about credit card bills--so what's left over?
Start Budgeting For Your Home Now
The best way to save up for a down payment is to write a monthly budget, stick to it, and start a savings account specifically for your down payment. Use an online mortgage calculator to determine how much down payment you need for your home and start saving--even if it's only $50 out of every paycheck. Cut back unnecessary spending, such as junk food, and put that money toward paying off short-term debt like your credit cards. If possible, try transferring balances from high-interest credit cards to cheaper cards so that you can pay them off more quickly and get closer to your new home.
Get a Home Loan with No Down Payment
Putting together your down payment requires great determination. Look to friends or family for help with a loan, they might be able to help more than you think. You can also borrow against some retirement accounts, such as a 401(k) or Roth IRA. Lastly, there are some first-time homebuyer programs that let you get a home loan without any down payment, or with as little as 3%. Check with a few mortgage lenders for your options to see if you qualify.
Remember to use a mortgage calculator to help you budget and plan for a home you can really afford. Start saving money now, and talk with a mortgage lender to investigate your new home loan options.
About the Author
Gabriel Traverso is a freelance writer, professional musician, and artist. He resides with his family in Reno, NV.
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