Your Down Payment

Many buyers can qualify for several different kinds of mortgages, but they can't afford a large down payment. Below are a few methods that will help you put together your down payment

Cut expenses and save. Be on the look-out for ways you can reduce your expenditures to put away money for a down payment. You could also try enrolling in an automatic savings plan at your bank to automatically have a set amount from your paycheck deposited into savings. You could look into some big expenses in your budget that you can give up, or reduce, at least temporarily. Here are a couple of examples: you might move into less expensive housing, or stay close to home for your annual vacation.

Sell items you do not need and find a part-time job. Look for an additional job. This can be exhausting, but the temporary difficulty can help you get your down payment. Additionally, you can make a comprehensive list of items you can sell. Broken gold jewelry can be sold at local jewelers. A closetful of small items can add up to a fair amount at a garage or tag sale. You might also explore what your investments will sell for.

Borrow money from your retirement plan. Research the details of your particular plan. Many homebuyers get down payment money by withdrawing what they need from their IRAs or borrowing from their 401(k) plans. You will want to ensure you understand about any penalties, the way this may affect on your taxes, and repayment terms.

Request a generous gift from family. Many homebuyers are often lucky enough to get help with their down payment assistance from thoughtful family members who are willing to help them get into their own home. Your family members may be willing to help you reach the goal of having your own home.

Learn about housing finance agencies. These types of agencies offer provisional mortgate loan programs to low and moderate-income buyers, buyers interested in renovating a home in a particular part of the city, and additional groups as defined by each finance agency. With the help of this kind of agency, you can be given an interest rate that is below market, down payment assistance and other benefits. These types of agencies may help eligible buyers with a reduced rate of interest, help with your down payment, and offer other advantages. These non-profit agencies to promote home ownership in particular neighborhoods.

Learn about low-down and no-down mortgage loan programs.

• FHA mortgages

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a significant part in assisting low to moderate-income Americans qualify for mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA aids first-time homebuyers and others who may not be able to qualify for a conventional mortgage loan by themselves, by offering mortgage insurance to the lenders. Down payment requirements for FHA loans are smaller than those of conventional mortgage loans, although these loans have average rates of interest. Closing costs may be included in the mortgage, and the down payment can be as low as 3 percent of the purchase price.

• VA mortgage loans

  VA loans are backed by the Department of Veterans Affairs. Veterens and service people can receive a VA loan, which usually offers a low interest rate, no down payment, and minimal closing costs. While the mortgage loans don't originate from the VA, the department verfifies borrowers by providing eligibility certificates.

• Piggy-back loans

  You can finance your down payment with a second mortgage that closes along with the first. Most of the time, the piggyback loan is for 10 percent of the purchase price, while the first mortgage finances 80 percent. The homebuyer pays the remaining 10%, rather than putting the usual 20% down payment.

• Carry-Back loans

  In the option of the seller "carrying back a second mortgage," the seller loans you part of his or her equity. The buyer funds the highest percentage of the purchase price with a traditional mortgage program and borrows the remainder from the seller. Typically you'll pay a somewhat higher rate with the loan financed by the seller.

The feeling of accomplishment will be the same, no matter which strategy you use to put together your down payment. Your brand new home will be well worth it!

Need to talk about down payments? Give us a call: (707) 252-2700.