.jpg)
If you were to call a lender today and say, "I just found this great home for $100,000 dollars and I want you to lend me $90,000 and I'm going to borrow the other $10,000 from my credit union.", that lender would say, "no". The general rule is that a lender will not allow you to borrow the down payment for the purchase of a property and if they find that you do, no matter how well off you are financially or credit-wise, your loan will be turned down. Their reasoning is that: "If you are not good enough at handling money to save the down payment, then you're not a good enough credit risk for us to lend you $90,000."
The exception to this rule is that if you are borrowing the money against an asset that you already own, then the lender will allow it. This exception opens up many possibilities for the person with assets but little cash. Are you a car buff with a valuable classic? Do you have a house full of beautiful furniture? Or a great stereo system? Whatever the case, you can go down to your local finance company and take out a loan using that asset as collateral and use the money as a down payment on that property you're after; and contrary to popular belief, you probably don't need to raise as much as you think. If you, were buying the above mentioned property with an FHA loan, the lender would require a total investment on your part of only about 6% to 7% of the sales price (in many cases, even less),or around $6,000 dollars, and that includes down payment and closing costs. So, on a property that costs $50,000, you would only need to raise about $3,000.
