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Buying Your Katy-Cinco-Ranch-Richmond Area Home For The Best Price!

Buying Your Katy-Cinco-Ranch-Richmond Area Home For The Best Price!


Buying Your

Katy-Cinco-Ranch-Richmond Area Home

For The Best

Price!

 

Chapter 11  How To Find Down Payment And Closing Money Part 2

Fred, Miller, Realtor serving Katy, Cinco Ranch, Pecan Grove, Richmond, Westpark Tollway, Fulshear. www.RichmondKatyHomes.com

Liquidate or Borrow Against Securities

Selling securities such as stocks and bonds are yet another option. Or consider liquidating a mutual fund or cracking open a CD for use as a down payment.

Borrowing against securities is also a possibility. Financial assets held by a bank or brokerage can be used as collateral for a loan and because it is secured, the rate is usually lower than that on personal loans. Many people use margin loans to buy securities but if you have a brokerage account you can use the money for anything you want. This can be a better alternative than selling if you qualify with the debt since there are no tax implications, you hold on to a good investment, and you may be more likely to be more disciplined about paying back a margin loan than saving to replace your investment.

Look at Your Life Insurance Policy

Does your life insurance policy have some cash value? If so, you may be able to borrow from 75 to 95 % of the cash value that’s built up. Repayment terms are usually liberal and often money that isn’t paid back will be simply be subtracted from your death benefit. Ask your agent to show you in writing how your dividends and future cash values will be affected by the loan and what impact that will have on your premiums over the years. Some insurers reduce the interest or dividend they pay on the assets in your policy if you have an outstanding loan, so it is important to check first.

Sell or Borrow Against an Asset

Do you have any property that can be sold to increase the amount of money you have available? Real estate, collectibles, jewelry, antiques, cars, boats, trailers, etc. are things you may own that can be sources of fast cash. Borrowing against an asset may also be an option if you qualify for a loan with additional debt.

Grant’s Programs

What Does A Grant Program Do?

It allows a buyer to obtain money for down payment and closing costs as a gift. The grant funds DO NOT have to be repaid by the buyer, but there are conditions. Usually the buyer must find a house that will appraise for the purchase amount plus the grant amount. Frequently the buyer must fit into a certain lower income bracket, or be a first time home buyer, or be a school teacher, or the house must be in a certain geographical area, or other conditions.

What are the Negatives?

1. You must satisfy the granting institution, as well as, the primary lender. This requires double paperwork and processing which may delay the closing date. (Some lenders, sellers and realtors will not participate.)

2. Frequently the buyer must stay in the house for a period of years before all of the “grant debt” is forgiven. With these factors in mind, you may want to try for a grant. These programs come and go, that is, sometimes money is available and sometimes not. Contact us if you are interested and I will see if one is available to you in the geographical area where you would like to live.

Next Chapter  How To Find Down Payment And Closing Money Part 3

Fred, Miller, Realtor serving Katy, Cinco Ranch, Pecan Grove, Richmond, Westpark Tollway, Fulshear. www.RichmondKatyHomes.com