How to Borrow Funds for a Down Payment for a Home

You can borrow the money for the down payment of a home, but be careful - lenders always want to know where the money comes from.

Difficulty: Moderate

Instructions

Things You'll Need:

• Calculators
• Personal Organizers
• Personal Financial Software
• Calculators

1. Borrow money from a pension or retirement fund.

2. Ask a friend or family member to loan you the money. Make it a personal loan not to be secured by any future property owned. Be prepared to show the lender documentation of the source of this money.

3. Borrow money against other property you own. If you have rental property or even a vehicle, you may be able to get a personal or secured loan.

4. Find an investor or co-signer to purchase property with you. This will give you access to your co-signer's money as well as yours. (Remember that you are not only using your co-signer's money, but his or her credit as well, so choose your partner wisely.)

Tips & Warnings

• Remember, money received from any sort of lender will show up on your credit report.
• Be aware of how much it will cost to pay back any loans you take out to get money for your down payment. All the money and payments you owe count against you when calculating your debt-to-income ratio (the total amount of monthly payments you owe versus your monthly income).
• Lenders may have limits on how much money can be borrowed and used for your down payment. Check with the lender before signing any agreements.
• Always document how and from whom any money got into your account. Keep copies of all documentation such as loan notes, copies of checks, signed agreements, receipts, deposits and statements.

on 11/22/2005 You can take up to $10,000 from a traditional IRA and not pay the penalty for early withdrawal to buy a home. You have to be a "first-time" home buyer, but that means you haven't owned a home (or been on title) in the past 2 years.