Mortgage Brokers and Down Payments

Because a licensed mortgage broker is familiar with many different types of situations, and has worked with many consumers with all kinds of backgrounds, he or she can assist even individuals who feel that, because they cannot come up with a down payment, they are simply not qualified to purchase their own home.

This is not always the case. A mortgage broker can help in more ways than one. First, a broker knows how to explain to his or her customers ways they can trim their budget and reduce their expenses in order to make saving up enough for a small down payment a realistic possibility. He or she can also advise clients on other possible sources for down payment funds, such as an Individual Retirement Account.

While mortgage brokers are not tax professionals, savvy brokers know that first-time home buyers can often avoid paying a tax penalty if they withdraw funds from an IRA to purchase a home, and will advise their clients to look into this option further and obtain the advice of an accountant to see if this is a good choice for them.

Should the above options be impracticable, or simply not an option, many mortgage loan brokers can offer programs that do not require a down payment. This is not a best case scenario, since the customer’s monthly payment will be larger, the interest rate they are offered will likely be higher, and they will probably have to purchase private mortgage insurance. However, if the lack of a down payment is all that is keeping a family from home ownership, a professional like a mortgage broker is someone who knows how to make it happen.