Your Down Payment

Many people who are looking to buy a new home qualify for various loan programs, but they don't have a large sum of cash to pay a down payment. Here are a few ways to put together your down payment

Slash your budget and build up savings. Be on the look-out for ways you can reduce your monthly expenditures to save toward a down payment. You also could enroll in an automatic savings plan at your bank to have a percentage of your pay automatically deposited into savings. Some effective approaches to put together funds include moving into less expensive housing, and staying home for your vacation for a year or two.

Work a second job and sell things you do not need. Maybe you can find an additional job to get your down payment money. You can also get serious about the possessions you really need and the things you can sell. You may have desirable items you can sell at an online auction, or household goods for a tag or garage sale. You might also research what any investments you hold will sell for.

Borrow from your retirement funds. Investigate the parameters of your retirement program. It is possible to take out money from a 401(k) for you down payment or withdraw from an IRA. Be sure you are clear about any penalties, the way this will affect on income taxes, and repayment obligation.

Ask for help from family members. Many homebuyers are sometimes lucky enough to get help with their down payment assistance from caring parents and other family members who are prepared to help them get into their own home. Your family members may be happy at the chance to help you reach the milestone of having your own home.

Research housing finance agencies. Provisional mortgage loans are extended to homebuyers in certain circumstances, like low income buyers or people planning to improve homes in a specific neighborhood, among others. With the help of a housing finance agency, you may be given an interest rate that is below market, down payment help and other advantages. These types of agencies can assist you with a lower interest rate, help with your down payment, and provide other benefits. The central purpose of non-profit housing finance agencies is build up the purchase of homes in certain places.

Research no-down and low-down mortgage loans.

• Federal Housing Administration (FHA) mortgages

  The Federal Housing Administration (FHA), which is inside the U.S. Department of Housing and Urban Development (HUD), plays a critical role in assisting low and moderate-income Americans qualify for mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA helps first-time homebuyers and others who may not be able to qualify for a traditional loan by themselves, by providing mortgage insurance to the lenders. Down payment sums for FHA mortgages are smaller than those with conventional mortgage loans, although these loans hold current rates of interest. The down payment can be as low as 3 percent and the closing costs might be covered by the mortgage.

• VA mortgage loans

  With a guarantee from the Department of Veterans Affairs, a VA loan assists service people and veterans. This specialized loan does not require a down payment, has reduced closing costs, and provides the benefit of a competitive rate of interest. Even though the VA does not issue the loans, it does certify 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 piggyback loan is for 10 percent of the purchase price, while the first mortgage finances 80 percent. Instead of the traditional 20 percent down payment, the homebuyer just has to cover the remaining 10 percent.

• Carry-Back loans

  With a carry-back mortgage, the seller loans you part of his or her equity. In this scenario, you would finance the largest portion of the purchase price with a traditional mortgage lending institution and finance the remaining amount with the seller. Typically, this type of second mortgage will have a higher rate of interest.

No matter your method of getting together your down payment, the satisfaction of living in your own home will be just as great!

Need to talk about down payment options? Give us a call: 7072522700.