Borrowing for your down payment:
For the most part, you aren't allowed to borrow
to come up with your down payment. However, there
is an exception. If the loan is secured against
some asset, you can borrow the funds.
For example, if you take out an equity line on
your present house, you can use those funds to
make the down payment on your next home. A lot
of people do this when they intend to rent out
their previous home. It also works in case you
aren't certain of the housing market. Since equity
lines are very inexpensive, it is a simple process
to line one up before you put your own house on
the market and begin looking for a new home. That
would allow you to make a "non-contingent"
offer, giving you more viability as a potential
buyer.
As long as the loan is secured, you can borrow
for your down payment. If you own a car free and
clear, then get a loan from your credit union
against the car, that is an acceptable source
of funds. If you have a stock portfolio and borrow
against it, that is also an acceptable source
of funds.
Of course, the payment on the loan is counted
as one of your obligations when calculating your
debt-to-income ratios.
A cash advance against your credit cards is not
a secured loan. Therefore, it is not an acceptable
source of funds. Neither is a signature loan from
your credit union. Neither is a loan from your
friend or family member. The loan must be secured
against some asset you own.
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