Putting Together Your Down Payment
Lots of borrowers qualify for a mortgage loan, but they don't have much to put up a down payment. Below are a few straightforward ways to get together a down payment
Reduce expenses and save. Scrutinize your budget to discover extra money to go toward your down payment. You might also try enrolling in an automatic savings plan to automatically have a set portion of your take-home pay deposited into your savings account. Some effective ways to put together funds include moving into less expensive housing, and staying home for your vacation this year.
Work more and sell things you don't need. Perhaps you can find an additional job and save your earnings. You can also get creative about the things you can sell. Maybe you own collectibles you can sell on an online auction, or quality household goods for a tag or garage sale. You might also explore what any investments you have may bring if sold.
Borrow from your retirement funds. Explore the details of your particular plan. It is possible to take out money from a 401(k) plan for you down payment or make a withdrawal from an Individual Retirement Account. Be sure to learn about the tax ramifications, repayment terms, and possible early withdrawal penalties.
Ask for help from generous members of your family. First-time buyers are sometimes lucky enough to get down payment assistance from gracious family members who are able to help get them in their own home. Your family members may be willing to help you reach the goal of buying your first home.
Contact housing finance agencies. Special mortgate loan programs are provided to homebuyers in certain circumstances, like low income buyers or homebuyers looking to remodel homes in a certain place, among others. Financing with this type of agency, you probably will receive a below market interest rate, down payment assistance and other perks. These kinds of agencies may help you with a reduced interest rate, help with your down payment, and offer other advantages. These non-profit programs to build up the value of homes in certain places.
Explore no-down and low-down mortgages.
- FHA mortgages
The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a vital part in aiding low to moderate-income families qualify for mortgage loans. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals who need to get home financing.
FHA assists first-time buyers and others who would not be eligible for a traditional mortgage loan by themselves, by providing mortgage insurance to the private lenders.
Interest rates with an FHA loan are usually the market interest rate, but the down payment amounts with an FHA loan will be lower than those of conventional loans. Closing costs might be covered by the mortgage, and your down payment might be as low as 3 percent of the total.
- VA mortgage loans
VA loans are guaranteed by the Department of Veterans Affairs. Service persons and veterans can qualify for a VA loan, which generally offers a low fixed interest rate, no down payment, and minimal closing costs. Even though the VA does not finance the mortgage loans, it does certify eligibility to apply for a VA loan.
- Piggy-back loans
A piggy-back loan is a second mortgage that you close with the first. Generally the piggyback loan is for 10 percent of the home's amount, while the first mortgage finances 80 percent. In contrast to the traditional 20 percent down payment, the buyer will just have to pull together the remaining 10 percent.
- Carry-Back loans
With a carry-back mortgage, the seller loans you part of his or her equity. The buyer finances most of the purchase price with a traditional mortgage program and finances the remaining funds with the seller. Typically, this form of second mortgage has higher interest.
The satisfaction will be the same, no matter how you manage to put together the down payment. Your brand new home will be your reward!
Want to discuss down payment options? Give us a call at 7072522700.