10 Ways To Build A Down Payment

If the one thing standing between you and your dream home is a down payment, Bankrate has some suggestions that may help you come up with one:

1) Pay off your Credit Card Debt. “Paying bills is not fun, but it definitely will help in your hunt for down-payment money. When you carry a credit card balance, the ever-accumulating interest charges mean more of your money goes to the card company each month. Keep that cash for yourself by cutting your debt load.”

2) Ladder CDs to boost savings. “Once you’ve got a few extra bucks, put it to work making more money for you.”

3) Special Programs. “There are many programs for home buyers in down-payment distress. Borrowers in a wide range of incomes, locales and professional groups may have access to aid from Fannie Mae and Freddie Mac, the government-sponsored offices that buy mortgages and package them as investments.”

There are more tips at Bankrate, including getting a gift, asking for a raise, getting a second job, and tapping your IRA. You have options!—MEGHANN MARCO

10 ways to come up with a down payment [Bankrate]

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  1. aka Cat says:

    If you have no cash but better than average credit, look for an 80/20 loan.

    The interest rate on the 20% loan will be a little worse than the rate on the 80% loan. But what you save by not paying the PMI (http://en.wikipedia.org/wiki/Private_Mortgage_Insurance) will make up for the higher interest.

    80/20s are also available as 80/10/10 and 80/15/5.

  2. CatMoran: Now that PMI is deductible, an 80/20 may not be the best option depending on the interest rate of that 20%.

  3. John says:

    “Look for Lost Loot”??? That’s great. Bank on that you’ll find buried treasure or no house for you! Actually, if you have enough savings bonds to significantly impact a down payment, and you “forgot” about them, maybe you shouldn’t be buying a home. And another idea on the list is “Get a gift”, ie, beg parents. These are great.