If you want to buy a home, there’s certain things you’ll need to get a mortgage. You’ll need a good credit score, some cash on-hand for the earnest money deposit, home inspection, pest inspection, and wind mitigation inspection, closing costs, and of course, a down payment. Though there are a number of home loan products available requiring a down payment ranging from 3.5 percent to 10 percent, and up to 20 percent, it’s not necessarily easy to come-up with the cash.

Even if you do qualify for a low down payment, you want to put as much money as you can in order to lower your monthly mortgage payment, which can help you pay more toward the principal, and, fetch a lower interest rate. This way, you can amortize the loan faster, a great way to save and invest more money for retirement. If you don’t have the cash reserves readily available, there are ways to get a down payment for a mortgage

Ways to get a Down Payment for a Mortgage

Though the housing meltdown that lead to a national economic downturn is in the past, its influence is nevertheless part of the current environment. During the years between 2008 and 2009, banks and other lenders lost hundreds of millions of dollars in defaulted debt instruments. Mortgages, home equity loans and lines of credit, credit cards, small business loans, private student loans, and more caused severe financial strain.

Although cheaper prices and record-low mortgage rates have made home buying increasingly attractive, tight lending standards continue to keep consumers on the sidelines. And while a beefed-up FICO score and documentation requirements may have slowed the process, it’s the pile of cash needed to secure financing that prevents many would-be buyers from becoming homeowners, says Susan Dewey, executive director of the Virginia Housing Development Authority. —U.S. News and World Report

In reaction, industry standards and government regulations changed to help minimize risk in the lending sector. Though many of these requirements have loosened, the majority of home loan products still require a down payment from borrowers. If you want to buy a home, but need cash, here are some ways to get a down payment for a mortgage:

• Take out a personal loan. You can take out a personal loan from a bank or credit union to deposit into your account. Generally, you’ll need to do this at least sixty days prior applying for a mortgage because the cash needs “seasoning,” a term used in the banking industry. You’ll want to borrow as little as possible as the average credit union personal loan carries an average interest rate of 9 percent.
• Apply for cash-out refinancing. If you currently own a home, you can use it to get a down payment through cash-out refinancing. Generally, borrowers can take out up to 80 percent of their property’s value and use it toward the purchase of another home.
• Get a home equity line of credit. Should you be looking into a vacation home in Orlando, you might consider getting a home equity line of credit. If your debt-to-income ratio is right, you’ll be able to take advantage of this option to purchase a second home or even an investment property.
• Use owned assets as collateral leverage. For those who own appreciable assets, this is another option for getting a down payment. You can use appreciable assets as collateral to receive the cash you need for a down payment for a home loan.
• Borrow from your 401(k) retirement plan. Your 401(k), 403(b), or other retirement account are also sources for down payment money. What’s great about borrowing from your retirement plan is you pay yourself back, with interest.