There are some other ways to be able to come up with a down payment these days that not everyone knows about.

The most common is to use your 401k. Most 401k programs will allow you to pull out money with no penalty in certain circumstances. Generally, one of them is to use as a down payment on a house purchase.

We've done this with several of our buyers and the process is pretty straight forward, quick and easy.

Here are the steps:

1. Contact your 401k provider and let them know that you would like to get money from your 401k to put down on a house purchase. They will give you instructions on what paperwork needs to be filled out and will tell you the maximum amount you are able to pull out.

2. Fill out the paperwork and get a purchase and sales agreement or lease/option agreement from the seller to show them.

3. Receive a check in the mail within a few weeks at most!

And here's something to think about. If you have enough of a down payment, you may more than likely be able to ask for Owner Financing right away. And if you haven't purchased a home in the past 3 years and have been renting, with the new laws that Obama passed, you would qualify for a $8,000 tax credit for purchasing a home in 2009.

And here's the kicker... the $8,000 comes to you regardless of the rest of your tax return numbers. In other words, it's really not a credit. The government will hand you $8,000 for free and you don't even have to pay it back as long as you live in your new home for a minimum of 3 years.

So let's say that you buy a home through owner financing this year and put $8,000 down as a down payment from your 401k (or any other source of money).

Then let's say that when you file next year's taxes, you don't qualify for a tax refund, or maybe you even owe some money. Regardless of that, the government will still send you $8,000.

If you have a tax refund on your taxes, you would get your refund plus the $8,000!

Now as a disclaimer, I am not giving legal and/or tax advice. Please check with your tax professional for further details.

But imagine this. You can put $8,000 down as a down payment and in a year, the government will return that $8,000 to you to put back into your pocket or back into your 401k!

And... did you know that JDK Real Estate Solutions will take items of value as a down payment? We'll get into that next with how our "Guaranteed Owner Financing" program works.

Today I want to talk to you about "seasoning." This is the process of building up evidence to provide to the bank to let them know that you are a good investment opportunity and not a risk.

When most people apply for loans, because there is nothing besides their credit for the banks to make a decision on, the credit makes or breaks the decision.

But what if there was something other than just credit that the banks could look at to make their decisions? If you could provide that to the bank and give them additional information besides just your credit, you can begin stacking the odds in your favor of getting a loan.

Although many people out there have bad credit scores because of their irresponsibility, there are many out there who had great credit scores and are highly responsible people that simply had something happen to them and ruined their credit.

Some of these things could be: divorce, victim of credit fraud, temporary loss of job, medical expenses, etc.

And if any of you have ever tried to fix your credit or even simply tried to have incorrect information on your credit report fixed, you may have found that this is not an easy task.

"Seasoning", if properly done, is the X-factor that could allow you to qualify for a loan when otherwise you couldn't.

So how do you get "seasoned"? You show the bank that you can afford the mortgage and that you are responsible and can be trusted to pay on time by providing evidence that shows this.

In other words, if the bank were to give you a mortgage and your monthly payments would be $1,300/mo including your taxes and insurance, then you need to show the bank that you can afford that.

Many lease/option buyer's go into a home that may rent for $1,000 and pay on time faithfully for a year or longer only to find that the banks will not accept that as proper "seasoning."

You see, in today's market, the market rent on a property is usually less than what the mortgage on the house would be. So if the mortgage would be $1,300/mo, the bank wants to see that you can afford $1,300/mo, not $1,000.

So how do you solve this dilemna? Do you pay $1,300/mo in rent when the market rent is only $1,000? No. You utilize a down payment assistance program to make up the difference.

If done properly, you can begin to build a convincing file of evidence for the banks.

We'll go into this down payment assistance program further in the next article in a couple of weeks.

If you haven't done so already, please fill out the detailed form on our website telling us exactly what you are looking for so that we can start working on your behalf to locate something for you and also personally consult with you to find the perfect house. It's the "Submit Buyer Info" tab on the left side of our webpage.

As I promised last time, we're going to dive into a little more detail on lease/options and some of the things that you should be aware of. We'll do this by answering the questions that I gave you at the end of the last article.

One of the questions I asked last time was: What happens at the end of my lease?

For most people, if you haven't made intentional plans and started the home buying process and set a closing date before the end of your lease/option, you are at the mercy of the property owner.

If they are nice, they could extend out your lease until you actually closed on the property.

But if they wanted to, they could force you out of the home, even if your closing date was set for the day after the end of your lease! I know that sounds horrible, but I hear stories like this all the time.

Why would someone do something like that? Because they never had the intention of selling you the house in the first place. They know that most people who go into a lease/option won't be able to purchase the home in 12 months or less.

So how do you protect yourself?

You want to make sure that your lease/option agreement has it in writing that you are allowed extensions to your lease/option at either 6 or 12 month intervals to allow you extra time to get a loan if you aren't able to get it within 12 months.

Especially in this market, being able to qualify for a loan in 12 months is difficult. In reality, you ought to be thinking 18-24 months to get properly "seasoned" and qualified to get a loan.

Get it in writing!!

In our contracts, we have an automatic 12 month extension at the end of the first 12 months with a 60 day notice and as long as the monthly payments are being made in a timely fashion.

After the 12 month extension, we allow for additional 6 month extensions for as long as necessary as long as payments are being made in a timely fashion.

Our contract basically says that we'll extend the lease as long as necessary.

Especially in this market, this is important. You don't want to get into a situation where you have a ticking time bomb at the end of 12 months.

If the seller really wants to sell the house, then they shouldn't mind extending out the lease/option to accommodate you getting a loan. And if they don't mind, then they shouldn't have any problem putting it in writing on the contract to protect your interest.

Most of the problems people have with lease/options happen because they got to the end of their lease and were forcibly kicked out of the house because they didn't close by the end of their contract, regardless of how well they paid or how much they put down as a down payment up front.

By making sure that you have extensions in your contract, you will protect yourself from this type of situation.

Another important thing to keep in mind is not only to have extensions built into your contract, but to have a definite plan to qualify for a loan.

We'll get more into this next time.