Rethinking Down Payment Sources: 3 Creative Ideas
As property prices increase, down payments increase, too. This reality can make it feel like buying a home is not possible. But here are three creative ways to source funds for a down payment that you may not have thought of.
- Use a HELOC to unlock the equity in your property, even Condotels!
With the increase in property prices, property values have increased, too – that means more equity! Do you already own a property? If so, you can use a HELOC to tap into its equity. Until recently, HELOCS were not available on Condotels, so take advantage of this incredible opportunity to unlock its equity.
HELOCs can typically be closed in as few as 30 days. Let Pacific Home Loans help you to obtain and apply these funds for use as the down payment on a new property purchase. - Use Gift Funds on any property type.
Most lenders only allow down payments to be made with Gift Funds for Primary and Second Homes. Pacific Home Loans has programs that allow for the use of Gift Funds for the down payment on any occupancy type – including Investors!
Eligible sources of Gift Funds can be a relative, a domestic partner, fiancé, and (recently updated to include) an unrelated friend (such as a Godparent). - Use Cross-Collateralization.
Is your equity tied up in your current home? Pacific Home Loans has a program for borrowers ready to purchase a new property with the equity from their current home listed for sale. Usually, this involves a second mortgage on the property that is being sold, and a first mortgage on the property that is being purchased. This cross-collateralization, or bridge loan, gives you the ability to make a quick offer in today’s fast-moving market or contract with sellers unwilling to consider offers that include sales contingencies. It provides you with more time to sell your existing property and the interest-only payments keep it affordable.
Pacific Home Loans is always looking for ways to make home ownership possible. Apply now or give us a call – we’d love to help you find ways to make home ownership not only possible, but affordable, too. See our last blog post to learn more about some Affordability Strategies!
