Allowable Down Payment Sources
Many people don't have much money to put toward down payment costs for a home. Here are possible solutions to a common cash problem:
Co-Borrower - Income or additional funds from a spouse may provide additional funds to support the down payment costs. Consider whether a roommate or co-dweller can relieve the financial burden.
Gifts - Monetary gifts from family members can support your down payment requirements since no funds repayment is required.
Inheritance/Trust Funds - Inherited money from family members or from a trust fund are also acceptable sources of down payment since no funds repayment is required.
Borrowing/Loan - Monetary support from friends or relatives can be another solution.
Retirement Funds - Some retirement funds like the 401K plans may allow you to borrow a certain percentage from your retirement fund. Check with your local lenders to see if they allow homebuyers to borrow against their retirement funds. Note: Borrowing against your 401K plan requires that you repay the amount; therefore, when lenders calculate your loan qualifications, they will add your 401K repayments in calculating your monthly payments.