401(k)/Retirement accounts or Liquid Assets – this option remains a viable source to procure down payment funds to buy a home.  Many 401(k) plans have special borrowing provisions that allow you to repay yourself X amount of dollars with preferential terms.  Some 401(k) plans even allow you to avoid penalties when buying a primary home, while others have fewer restrictions for first-time home buyers (defined as someone who has not owned a home in the last 36 months).  Every 401(k) plan is different, so be sure to check with your employer human resources department about details.  Additionally, if you have liquid assets, your financial institution may allow you to take a loan against your cash.

Home Equity Line of Credit (HELOC) – f you already own a home and are looking to purchase another home such as a second home for example or even an investment property, you can borrow monies from a home equity line of credit as those monies are considered to be your own funds.  As long as your income and debt picture support the down payment associated with the home equity line of credit as well as the other monthly carrying costs, (taxes, insurance, HOA) you’re ok.

Cash Out Refinancing – You could do a cash out refinance on your current home (potentially as high as 80% of the value depending on your occupancy) and use those monies to acquire another home.   Cash out refinancing generally will work up to 80% loan to value on a primary home transaction; 70% loan to value financing on a rental property; and 75% financing on a secondary home.

Personal loan – a deposit of funds to your account acquired from a personal loan may be considered eligible only after 60 days of “seasoning.”  Seasoning is a banking term that refers to the period funds are in a bank account for use in a mortgage transaction.

Mortgage tip: Mortgage brokers, banks and lenders want to know you have your own financial capacity to save the down payment funds or obtain them via a donor.