Can I Borrow Mortgage Down Payment Money?
When you are ready to buy a home, struggling to have enough money to make the down payment leads many to wonder, “Can I borrow mortgage down payment money?” and “How can I borrow mortgage down payment money?” You may even wonder how to make your down payment on your mortgage save you money.
Can I borrow mortgage funds from family?
Under most circumstances, you cannot use borrowed funds for a down payment. In fact, if money is provided by family members or friends for your down payment, almost always it must come in the form of a gift and be accompanied by documented proof (in the form of a letter from the giver) that the money is not required to be repaid.
How does a down payment on your mortgage save you money?
Because your down payment reduces the amount you must borrow, and therefore the amount of money you must pay interest on over the course of the loan, you can let your down payment on your mortgage save you money.
Can I borrow mortgage down payment money from my retirement account?
One of the few approved methods of ‘borrowing’ money for your down payment that will allow the down payment on your mortgage save you money on your loan is by borrowing the money from your 401(k).
While rules may vary and you should check with your specific retirement fund, as long as you pay the 401(k) funds back within a specified amount of time, you can not only borrow from your retirement fund to provide for your down payment, but you can often do it without any kind of tax penalty.
If you choose to use your 401(k) retirement funds for a down payment on your mortgage, save your self the financial frustration at the end of the tax year by setting up a payment plan that will ensure the loan is paid back within the specified period required to prevent having to pay taxes on the lent funds taken from your retirement account. If you do not pay back what you borrow from your 401(k), you will not only have to pay taxes on the money when you file, but you may also have to pay a penalty for the early withdrawal.
Biography: Monica McKinney is a Mortgage Loan Strategist, licensed and certified in Real Estate and Mortgage Loan Brokering. Monica is also an Award Winning Writer and has just authored an exciting new mortgage approval guide, “Mortgage Approved!: Your Easy All-In-One Home Loan Kit, The ONLY Mortgage Approval Guide You’ll EVER Need”. This great approval guide book is filled with insider secrets, mortgage loan help and mortgage loan tools. Get more mortgage information from Monica. Click: Get Informed…Get A Mortgage