Down Payment Options

• TRADITIONAL SAVINGS: Use traditional savings. A typical scenario would be to use up to 3.5% of the sales price as a down-payment on an FHA loan, or 5% of the sales price on Convention loan.
• SELLER PAYS: Depending on the terms that your Coldwell Banker Devonshire Realty agent helps to negotiate with the seller, you may be able to have the seller pay for your closing costs.
• GIFT: Ask a family member for a gift. FHA loans allow an immediate family member to "gift" you a down payment - tax-free to both you and them. 
• REDUCE INCOME TAX WITHOLDINGS TO SAVE DOWNPAYMENT MONIES*: If you anticipate being eligible for the Federal First-Time Home Buyer Tax Credit and intend to claim it on your 2008 Income Tax filing, and your income is sufficient to support it, you may consider lowering or eliminating your Federal Income Tax withholding. This "extra money" can then be set aside each pay period toward your down payment.
• Prospective home buyers who believe they qualify for the tax credit are permitted to reduce their income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable the buyer to accumulate cash by raising his/her take home pay. This money can then be applied to the downpayment.
• Buyers should adjust their withholding amount on their W-4 via their employer or through their quarterly estimated tax payment. IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS of income tax and possible interest charges and penalties.

*We strongly recommend that you obtain a pre-approved mortgage loan before you begin the tax withholding process.

• VA MORTGAGED BACK LOAN: If you are/were a member of the Armed Forces, you may be eligible for a VA-backed mortgage loan that requires 0% down.
• LIFESTYLE CHANGES: Many prospective homeowners have reported success in saving for a down payment by making small but reasonable lifestyle changes. For example, an average of $20 per weekday in eating-out equals $5,200 per year alone. Cutting that back, along with other small lifestyle changes can pay for your upfront down payment, and maybe more!