Your Down Payment

Lots of borrowers can qualify for various loan programs, but they can't afford a large down payment. Do you want to buy a new home, but aren't sure how you should get together a down payment?

Tighten your belt and save. Look for ways to reduce your monthly expenditures to save toward a down payment. Also, you can look into bank programs in which some of your take-home pay is automatically transferred into savings each pay period. You might look into some big expenses in your budget that you can live without, or reduce, at least temporarily. Here are a couple of examples: you may move into less expensive housing, or skip a family vacation.

Sell things you do not need and get a second job. Try to get an additional job. This can be exhausting, but the temporary trial can provide your down payment money. You can also get creative about the items you migh be able to put up for sale. You may have desirable items you can put up for sale at an auction website, or household goods for a tag or garage sale. You could also explore what your investments may bring if sold.

Borrow funds from a retirement plan. Research the specifics of your particular plan. Some homebuyers get down payment money from withdrawing funds from IRAs or borrowing from 401(k) plans. Make sure you are knowledgable about any penalties, the way this will affect on your taxes, and repayment terms.

Ask for help from generous family members. First-time homebuyers are sometimes fortunate enough to receive help with their down payment assistance from thoughtful family members who are eager to help get them in their first home. Your family members may be eager to help you reach the goal of having your first home.

Learn about housing finance agencies. Provisional mortgage programs are provided to homebuyers in specific circumstances, such as low income buyers or homebuyers planning to renovating homes in a specific place, among others. Financing through this kind of agency, you may receive an interest rate that is below market, down payment assistance and other benefits. These kinds of agencies can assist eligible homebuyers with a reduced interest rate, help with your down payment, and offer other advantages. These non-profit agencies to boost community in certain neighborhoods.

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

• Federal Housing Administration (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 helping low and moderate-income Americans get mortgages. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals who need to get mortgage loans. FHA assists first-time homebuyers and others who may not be eligible for a typical loan by themselves, by providing mortgage insurance to lenders. Interest rates for an FHA loan typically feature the current interest rate, but the down payment for an FHA loan are smaller than those of conventional loans. The required down payment may go as low as 3 percent while the closing costs could be covered by the mortgage loan.

• VA loans

  VA loans are guaranteed by the Department of Veterans Affairs. Veterens and service people can receive a VA loan, which usually offers a competitive interest rate, no down payment, and reduced closing costs. While the mortgages aren't actually issued by the VA, the department verfifies borrowers by providing eligibility certificates.

• Piggy-back loans

  You may finance a down payment using a second mortgage that closes with the first. Most of the time, the piggyback loan is for 10 percent of the home's amount, while the first mortgage covers 80 percent. Rather than the traditional 20 percent down payment, the buyer just has to cover the remaining 10 percent.

• Carry-Back loans

  In a "carry back" situation, the seller commits to lend you part of his own equity to help you with your down payment funds. The buyer finances most of the purchase price with a traditional mortgage program and finances the remaining funds with the seller. Typically, this type of second mortgage will have higher interest.

No matter your strategy of putting together your down payment, the thrill of living in your own home will be just as sweet!

Want to discuss down payment options? Call us: 7072522700.