Your Down Payment

Many borrowers qualify for a mortgage loan, but they don't have a lot of cash to pay a down payment. Below are a few methods that will help you put together your down payment

Reduce expenses and save. Turn your budget upside-down to find ways you can cut expenses to go toward your down payment. Also, you can look into bank programs in which some of your take-home pay is automatically deposited into a savings account every pay period. Some practical ways to put together funds include moving into less expensive housing, and staying home for your vacation this year.

Work more and sell items you don't need. Try to find a second job. This can be exhausting, but the temporary trial can provide your down payment money. You can also seriously consider the possessions you really need and the items you may be able to put up for sale. You might own desirable items you can sell on an online auction, or household items for a tag or garage sale. Also, you might want to look into selling any investments you hold.

Borrow from retirement funds. Explore the details of your individual plan. Many people get down payment money by withdrawing from IRAs or taking funds out of their 401(k) plans. You will want to ensure you know about any penalties, the way this may affect on taxes, and repayment terms.

Ask for assistance from generous family members. First-time buyers are often fortunate enough to get down payment assistance from giving family members who may be anxious to help them get into their own home. Your family members may be pleased to help you reach the milestone of buying your own home.

Research housing finance agencies. Provisional mortgate loan programs are extended to homebuyers in specific circumstances, such as low income purchasers or homebuyers looking to improve houses in a specific place, among others. With the help of a housing finance agency, you probably will receive an interest rate that is below market, down payment assistance and other perks. Housing finance agencies may assist you with a lower rate of interest, get you your down payment, and provide other benefits. The principal purpose of not-for-profit housing finance agencies is build up the purchase of homes in certain places.

Learn about low-down and no-down mortgage loans.

• FHA loans

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a significant role in assisting low to moderate-income buyers qualify for mortgage loans. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA offers mortgage insurance to the private lenders, enabling homebuyers who might not qualify for a typical mortgage, to receive a mortgage. Down payment amounts for FHA loans are below those with typical mortgages, even though these mortgages have current interest rates. The down payment can go as low as three percent while the closing costs could be included in the mortgage loan.

• VA loans

  VA loans are backed by the Department of Veterans Affairs. Service persons and veterans can receive a VA loan, which usually offers a reasonable fixed rate of interest, no down payment, and minimal closing costs. Even though the VA does not provide the loans, it does issue a certificate of eligibility to apply for a VA loan.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes along with the first. Usually the first mortgage covers 80% of the purchase amount and the "piggyback" is for 10%. The homebuyer pays the remaining 10%, rather than having to put together the usual 20% down payment.

• Carry-Back loans

  In the option of a 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 through a traditional mortgage program and finances the remaining funds with the seller. Generally, this form of second mortgage will have a higher rate of interest.

The satisfaction will be the same, no matter how you manage to come up with the down payment. Your brand new home will be worth it!

Want to discuss down payment options? Give us a call at (707) 252-2700.