Mix and Match.
This is where you get to be creative and put several techniques together. For instance, you find an investor who with a home that has an older assumable loan and is willing to carry the 2nd mortgage for you.
Or to be more creative, you could rent-to-own a home for 5 years. At the end of the five years you purchase the home by doing a wrap-around mortgage with the owners VA loan, and to sweeten the deal, you throw in that boat that has just been sitting in storage costing you money, and get an additional $6000 off of the purchase price of the home.
I think you get the idea now.
Find a Returned or Repossessed Mobile Home.
Don’t just look into houses. In some areas mobile homes are a good deal. In some areas of Arizona, for example, the land prices are rising so fast that it makes the mobile home worth it, even it the home itself depreciates every year. You often can find a great deal on these homes, as well as motivated sellers.
When you buy land it is easier to find owners who will carry the loan with no qualifying. If you are a construction type, you can build your own home.
If you plan on building, though, be careful. Loans to build a home are sometimes harder to qualify for and get than standard home loans. On the other hand, once you have purchased your land you now have an investment property that you can use to sell or trade to get your new house, or at least the down-payment for it. Or save the land until you are able to build.
If you live out in the country you might be able to put a mobile home on the property. Mobile home loans are sometimes easier to qualify for than a house. Even if you can’t get a new one, older ones are often for sale cheap, and can be moved.
“Look into Community “Sweat Equity” Programs
Check into community programs. They can be a very valuable resource, particularly if you have nowhere else to turn. Our community has a program that helps single parents and other financially struggling people to build their own home. They use “sweat equity” to make the down payment. It takes almost a year of part time labor, but you get help from professionals and volunteers, automatic equity in the new house, and a loan for the rest, even though you may not qualify under ordinary circumstances.
These sweat equity programs are becoming more and more popular and are getting more funding. The Bush administration awarded $25 million in “Sweat Equity” grants to communities and organizations in 2003 and the funding continues to go up.
There are now an amazing number of organizations that want to help you get into a home of your own. Besides the many charitable organizations doing this, HUD (U.S. Department of Housing and Urban Development) funds many counseling agencies that can show you ways you can get into a house. Consider taking advantage of the help they offer. It may take some research, but it could be well worth your time.
Below are some national organizations that can refer you to local members or affiliates in your area. Check out the information to see if there is an available program for you in your community:
- Habitat for Humanity International
- Rebuilding Together, Inc. (formerly Christmas in April)
- Community Action Partnership (formerly the National Association of Community Action Agencies)
- Enterprise Foundation
- Self Help Enterprises
- National Low Income Housing Coalition
- HUD (U.S. Department of Housing and Urban Development)
- Rural Development (USDA)
- Northwest Regional Facilitators
- ACORN Housing Corporation
- Wisconsin Association of Self-Help Executive Directors
- Portable Practical Education Preparation Inc. (Arizona)
- National Congress for Community Economic Development
- Emergency Food & Shelter Program
More Ideas for Raising Money for a Down Payment
You may already have the money for a down payment within reach, and didn’t even realize it. Here are some extra ideas for raising cash:
1. Borrow money from relatives or friends for a down payment.
2. Sell or borrow against other property or real estate you may own.
3. Sell a second car, RV or boat that you own and use the cash for the down payment.
4. Sell heirlooms or collectibles you own to raise money for a down payment.
5. If you own securities you can sell them or borrow against them through a loan from the stock brokerage.
6. Cash in or borrow against the built-up value of any life insurance you have.
7. Withdraw money from your IRA. If you're a first-time buyer you can pull out $10,000 penalty-free (though you must pay state and federal income tax on it) to put toward your home purchase. If you're not a first-time buyer, pullout the very least amount you must. Otherwise, you will have to pay both the 10 percent penalty and income tax on an early withdrawal.
8. Borrow against your retirement funds. In some cases, the rate on the loan may be as small as 2 percent. If you add too much to your debt burden, however, you may not be approved for a loan.
9. Change the withholding taxes, if permitted, on your salary in anticipation of higher deductions when you get a mortgage. Your take-home pay will increase, giving you more funds to put toward a down payment.
10. Pawn something you own and use the proceeds for a down payment. You can get the item back after you've moved in and can afford to pay the pawnbroker back.
11. Refinance your car or other vehicles and add the proceeds to your down payment.
12. Negotiate for a balloon payment. This is just a way of buying time. You sign a contract that says you will pay a certain amount at a later specific date. You still have to come up with the cash. It just gives you more time.