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Can I Borrow My Loan Down Payment to Buy Property?


Q: I am looking into buying a duplex. I would be getting a loan but I would still like to put a downpayment of 10%-20% which I would like to find a private lender to pay for.  Vicente, Pomona, California

A: Vicente, traditional lenders often require borrowers to ‘source’ the money they contribute to the purchase of property and a lender may refuse to approve a loan where the entire down payment comes from even a gift or if the gift is not from a close family member.

Generally, lenders want to know who else their borrowers are borrowing from and ultimately, your ability to borrow a down payment depends on the requirements of the primary lender you’re borrowing from.  If it’s a traditional bank, you may have a problem borrowing a down payment, but maybe not if you’re using a non-traditional capital source like a private lender.

Thanks for your question, Vicente.  Good luck.

For more real estate tips and information, visit my blog at geraldlucas.com.

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