Rebecca Richardson - Mortgage Consultant
Consider these 3 alternatives to buy that dream house
There are a variety of ways to get into your dream home that many people just don’t consider that can be less expensive in the long term. And who doesn’t like the sound of saving money when buying a house? But these aren’t just your everyday tips and tricks. There may be a little work on your end with your mortgage lender to make it happen, but could be worth it.
Concessions vs. repairs
Do you know what to do if you find some minor issues on the inspection report, but there’s not enough time to fix them before closing?
Why don’t you ask for a seller concession? That’s when the seller pays some of the buyer’s closing costs. For example: If repairs cost $5,000 and closing costs are $7000, you can negotiate to have the seller give you a credit and you just have $2,000 in closing costs.
It’s a common negotiating tactic but it’s also a win-win. The seller doesn’t have to delay closing to make the repairs, and you don’t have to wait for those repairs to be complete before you close. Bonus, you also have more money after closing to make the repairs yourself.
Use assets as income
Did you know you can use assets – like investment accounts – as income to qualify for a home?
👉 The first way is called asset depletion, which is where some borrowers can use a portion of their assets. You then take that amount and divide it by how many months your mortgage will be and that can be counted as income.
👉 The second way is that if an asset is titled in a trust and if there is a provision that a certain amount will be distributed each month and there’s enough in the account for 3 years then that also counts as income.
Borrow your down payment
Did you know you can borrow your down payment without the payments counting as extra debt?
When people are planning on a down payment, they usually turn to checking or savings accounts. Especially in markets like this when they don’t want to take money out of the stock market.
One thing worth considering is taking a 401(k) loan. It’s an allowable source for a down payments and the payments don’t count as additional debts on your mortgage application. Be sure to check with your 401(k) plan administrator for specifics on your options and the process.
And tell me if you’d consider this option.
There are several different financial options when it comes to buying a home that many mortgage brokers may not even be considering for you. That’s why it is important to know your options and work with a mortgage broker who is looking out for your best interest.
My team and I are available to help. Just reach out to us to start the process.