How to Find Money for a Down Payment
Author: Joshua Dorkin • URL: http://www.biggerpockets.com/August 26th, 2006 •
Dewita over at Urban Trekker covered Seven Ways to Accumulate a Down Payment earlier this week. Her list included:
1. Have your parents give you the money as a gift.
2. Borrow against your 401K or insurance policy.
3. Sell or borrow against an asset.
4. Obtain low point or zero point loan.
5. Ask the seller to pay for all or a part of your non-recurring closing costs.
6. Ask the seller to carry back financing.
7. Consider different loan programs.
Off the top of my head, there are a few others I’d like to add to the list:
8. Use one or multiple credit cards for the money
9. Post your needs on a site like Prosper.com and let a bunch of private lenders compete to give you money.
10. Ask a friend or family member
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Tags: borrow, Credit, down-payment, downpayment, lender, loan
Joshua Dorkin
Charles Feldman
Ted Karsch.
Troy Schuricht
Anwell Tsai
Richard Warren
Jim Watkins
Yikes! Using a credit card to come up with a down payment for a mortgage.
My personal opinion on this is “Don’t ever do that” - Using a credit card to finance a down payment will likely result in a foreclosure on the home within a few years.
A down payment on a mortgage is a huge amount and the interest charges associated with borrowing on a credit card are astronomical. I would advise consulting with a lender before taking such action.
What I personally recommend using a credit card to gain more money for is starting an internet business. The costs are relatively low to start so the interest charges won’t lead to financial ruin as they would if one were to take out an advance on their credit card for the downpayment.
Sometimes, using a credit card is sometimes a viable option. I’m not advocating it, just suggesting it as an option. Some hard money guys will actually charge more then your cards will, surprisingly. Just something to think about.
Good point, I have personally gone down the road of financing on a credit card and want to warn others of the financial hardship this can cause.
Hey, avoiding those hard money lenders is a wise financial decision too. Sometimes patience must prevail
Another idea is to find someone who’s interested in investing, but doesn’t want to do any of the work. Then you can do all the work, and split the proceeds.
I agree with Bryce but where do you fiend these investers? I would like some help on fiending those people. I have many properties in site with lots of return but I can not come up with the money to start.
THANKS