Consider Your Options for Your New Home Purchase Downpayment

Posted on: September 1, 2012

Coming up with the required minimum downpayment is the biggest hurdle that many potential home buyers face all the time. While many potential buyers make enough money to pay the mortgage on a house, many people have difficulty saving up the 10% to 20% that you might really need for a mortgage today, under traditional lender financing. If you’re having trouble saving for your downpayment, consider your options. You might just have a creative solution already in place.



Many people invest in stocks as a long-term retirement option. If your stock portfolio is healthy, it might make sense to sell some of your stocks to come up with the cash for a downpayment on a home. Owning a home has many tax benefits and is a good long-term investment, and liquidating some stocks to make the purchase presents an easy home ownership opportunity for many people.  Check with your financial advisor and tax accountant before you make a move to consider all angles involved in this creative financing outlet.


Insurance Policy

Do you have a life insurance policy you can borrow against? If you’ve been paying life insurance for years, you may be able to cash out your policy or borrow against it to come up with money for your downpayment. Talk to your insurance agent to see if your policy gives you this option.


Retirement Fund

While it’s generally not a good idea to raid your retirement fund for frivolous purchases, buying a home is an exception to the rule. Many retirement funds are set up with a provision that enables you to borrow or withdraw money if you’re using it to buy a home. Take a look at your retirement plan and see if this is an option for you.



If you’re close to having the cash you need to buy your home, but you’re not quite there, you could always consider selling some valuables. Things like art, jewelry or antiques can be nice to have, but they can also fetch a chunk of change if you need money for your downpayment. Maybe you can sell your fancy sports car and buy a more practical replacement, and use the difference for your downpayment.


You’ve got a lot of options to raise the money to buy a home. Think outside the box and examine all of your downpayment options before you give up on your home ownership dream.  The answer may be well within reach for you already.


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