Where can I get money for a down payment on a home? | Consumer Financial Protection Bureau (2024)

FAQs

How to borrow money for a down payment? ›

If you already own a home, the most common way to borrow money for a down payment is with a home equity loan or a HELOC. Other options include 401(k) loans, bridge loans, or accepting a cash gift from family or friends. Most lenders won't allow you to use a personal loan.

Down payment assistance comes in many forms, but some of the most common include: Second mortgages with zero percent interest. Grants, which are not required to be repaid. Loans that may be deferred, due upon sale, refinance or payoff of first mortgage.

We're the Consumer Financial Protection Bureau, a U.S. government agency dedicated to making sure you are treated fairly by banks, lenders and other financial institutions.

Down Payment is related to a purchase transaction while Funds from Borrower is used for all other transactions. For purchase transactions, Down Payment simply represents the difference between the purchase price and the principal amount of the loan governed by this Closing Disclosure.

Key takeaways. An 80/10/10 piggyback loan is a type of loan that involves getting two mortgages at once: One is for 80 percent of the home's value and the other is for 10 percent. The piggyback strategy lets you avoid private mortgage insurance or having to take out a jumbo loan.

If you're a buyer who is well qualified to make monthly payments but feeling shut out from the housing market by a lack of upfront cash, ask your lender about low- or no-down payment loans, and also look into government grants and loans that can help make your dream of homeownership a reality.

Who can gift money for a mortgage down payment? Most loan programs allow gift money from family members, including parents, grandparents and siblings, spouses, domestic partners and significant others. Some lenders also permit gifts from non-relatives.

You can save for a house by using high-yield savings and CD deposit accounts, cutting back your spending elsewhere and looking for down payment matching programs. If those strategies aren't enough, you might also consider asking for a raise at work or even moving back home for a while to cut rent payments altogether.

It is possible to borrow additional money on your mortgage, but it may not be your best option. Taking out a larger mortgage than you need can help you cover upfront expenses such as moving costs, new furniture and home renovations.

Proof of funds (POF) is a document that demonstrates how much money a person or entity has available. When purchasing a home, you may need a POF to prove to the seller that you can cover the purchase costs of a home. Remember that purchase costs can include the down payment, escrow and closing costs.

What documents do I need for a down payment? ›

The real estate down-payment receipt is a receipt for funds provided to a seller from a buyer because of the first payment towards a piece of property. A down-payment may be a percentage of the total sale price of the property in question and must be paid during the closing process.

The Consumer Financial Protection Bureau (CFPB) helps consumers by providing educational materials and accepting complaints. It supervises banks, lenders, and large non-bank entities, such as credit reporting agencies and debt collection companies.

The CFPB has primary authority to enforce federal consumer financial laws for banks and other depository institutions with total assets of more than $10 billion, and their affiliates, which collectively hold more than 80 percent of the banking industry's assets.

Borrowing money for a down payment isn't a good idea and generally isn't possible with many lenders. If you're considering a personal loan as a substitute for saving up for a down payment, consider these drawbacks: Mortgage interest rates are more competitive.

You can save for a house by using high-yield savings and CD deposit accounts, cutting back your spending elsewhere and looking for down payment matching programs. If those strategies aren't enough, you might also consider asking for a raise at work or even moving back home for a while to cut rent payments altogether.

You'll typically need to sign a gift letter that states your name, contact information, the gift amount and relationship to the borrower. You can gift funds for a down payment and avoid a gift tax if you stick within the IRS exclusion amount, which is $18,000 per year for 2024.

If you're considering a car that costs $25,000, putting down between $2,000 and $4,000 would be wise. However, the true answer to this question depends on your negotiation strategy. If you can negotiate a lower price or better terms, putting more money down may not save you much interest.