Acceptable Sources of Down Payment Funds | Carlos Scarpero, Mortgage Loan Officer in Dayton, Ohio, NMLS #1674385

Acceptable Sources of Down Payment Funds

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It's tax refund season again and one of the questions I often hear this time of year is "Can I use my tax refund as part of my down payment?"

The answer is YES!

Before I get into this though, let's discuss how much you actually need. If you are buying with USDA or VA Financing, you don't need any down payment at all! 

For Conventional Financing, you need 3% down and for FHA Financing, you typically need 3.5% down. Don't worry about that yet. When I talk to you about your application, I will let you know which program is best for your situation.

For closing costs, I recommend that you get a seller's credit written into the contract. With a seller's credit, you have the seller pay for your closing costs. Usually, you add this amount to your offer so the seller gets the same amount they would have gotten anyway. Your Realtor will help you with this.

Here are some of the acceptable sources for down payment funds:

  • Wages 
  • Bonuses
  • Tax Refunds
  • Down Payment Assistance Programs
  • Gift Funds from Relatives (FHA and Home Ready only)
  • IRA Withdrawals
  • 401k Loans
  • Money Gained From Selling Your Unwanted Items on Ebay

 Things that are not acceptable as a source for down payment funds:

  • Credit Card Cash Advance
  • Personal Loans
  • Car Title Loans
  • Any Other Debt 

So, there you go. If you are ready to get started, click on the button below.

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