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    What Options Do I Have For A Mortgage Down Payment

    One of the most complicated things that home buyers in Orange County have to deal with is coming up for the money to make a down payment on a home. Not everyone saves money like they should, so coming up with a down payment can seem difficult, but it’s not impossible. Here are some ways clients have come up with down payments in the past.

    Friends and Family

    The first place many people turn for help to get a down payment to buy a house in Orange County are their friends or family. You could ask friends or family members to loan you the money for a down payment on a home or you could ask one of your trusted friends or family members to be a co-signer on a loan for a down payment. Beware though as this can be risky by putting a strain on relationships should the money not be paid back according to the terms agreed upon.

    Sell or Borrow Against Your Existing Real Estate  

    Let’s say you already have a rental home in Orange County, or even your current home. You can consider either selling the Real Estate that you already own or borrowing against that property to take out a loan for the down payment on your second home. Again, borrowing against a current home for a down payment may put that home at greater risk since you are leveraging more of that asset to buy another property.

    Sell Your Assets

    If you have assets like heirlooms, collectibles, life insurance policies with cash value, or stocks, you may consider selling those assets and using the cash that you receive for a down payment on a home.

    Utilize Your IRA

    First time home buyers who have IRA’s can consider pulling out $10,000 from their IRA because they can do so without having to pay any penalties. However, you will have to pay Federal and State income tax on that money if it be using it for a down payment on a home. Not to mention that the long term appreciation of that money may have been worth several times the original $10,000 at retirement age.

    Choose A HUD or FHA Loan

    Last of all there are FHA, HUD, CalHFA or VA loan if you are in the military because, these loans require little to no money down and can save you tens of thousands of dollars at the time of purchase. However, as with other loan types, these will cost more in the long term as you are still borrowing a substantial portion of the purchase price of the property versus making a larger down payment.

    For more information on how to come up with the money for a down payment on a mortgage, or to view the latest Orange County Homes for sale, contact Fred Sed & Associates today by calling us for a free consultation at (949) 272-0125.

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