Buying a home is no easy task. One of the main things you need to buy a home is a good down payment. This will allow you to get the lowest interest rate and the lowest possible payment based on your credit score, income, and purchase price. Here are three creative ways to find a down payment.

1. You can borrow money from your 401k or your retirement fund. Most 401k and / or retirement funds give you the option of borrowing from the account to purchase a primary home. As long as you don’t already have a loan on your 401k account, this should be a very viable option. Borrowing against a 401k allows you to use the money for a down payment typically up to 70 percent of the total 401k balance. You borrow on this money at 0% interest or 1% interest. The interest rate that you will get on your 401k, if any, is extremely favorable and the best part about it? This is pre-tax, so if the payment is $ 200 per month, it will only look like a bond of 100 per month.

2. Take out a personal loan. To do this, you will first need to have high income and low debt. If you find yourself in such a situation, you could take out a personal loan for, say, $ 20,000. Deposit all that money into your bank account, then after 60 days the money is seasoned in the eyes of the mortgage company, allowing you to use that loan money to buy a house since you can buy now that you have the money in the bank. Now, this will factor into your debt ratio as well as your income and other monthly expenses including any other loan, car, credit card, or installment loan in your life, for example, all to take into account. charges a new payment obligation.

3. Finally, donor funds or cash donations are always a possibility. While it may be the most emotionally difficult to have, “I have to be brave enough to ask a family member for help,” it is a tangible solution. It will work on almost any FHA, VA mortgage program, conventional financing, etc. The entire deposit, even closing costs, can be counted against donor funds. The donor will need to provide a signed gift letter. It would be a good idea to have it done and signed before you go looking for a home.

If you’re thinking about buying a home and can afford the mortgage payment, it’s usually the best time to buy a home. As long as your income is stable, you are optimistic about your finances and have a long-term plan in mind. Buying a home is a good financial investment.

Scott Sheldon is a local mortgage lender, with a decade of experience assisting consumers with the purchase and refinancing of primary residences, second homes and investment property. Learn more about

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