Your Down Payment

Lots of borrowers qualify for a mortgage loan, but they can't afford a large down payment. Below are a few ways to get together your down payment

Slash your budget and build up savings. Scrutinize your budget to uncover extra money to go toward your down payment. There are bank programs in which a portion of your take-home pay is automatically deposited into savings each pay period. You could look into some big expenses in your budget that you can give up, or trim, at least temporarily. For example, you may decide to move into less expensive housing, or stay close to home for your annual vacation.

Work more and sell things you do not need. Try to find a second job. This can be exhausting, but the temporary trial can provide your down payment money. Additionally, you can put together an exhaustive list of items you may be able to sell. Broken gold jewelry can be sold at local jewelry stores. A closetful of small things may add up to a nice sum at a garage or tag sale. Also, you might want to think about selling any investments you own.

Borrow from your retirement funds. Check the parameters of your particular program. Many people get down payment money by withdrawing what they need from their IRAs or getting money out of 401(k) programs. Be sure you are clear about any penalties, the effect this may have on your income taxes, and repayment obligation.

Ask for help from members of your family. First-time homebuyers are sometimes fortunate enough to get help with their down payment assistance from giving parents and other family members who may be eager to help them get into their first home. Your family members may be pleased to help you reach the milestone of having your own home.

Learn about housing finance agencies. These types of agencies extend special loan programs to low and moderate-income homebuyers, buyers interested in renovating a house within a targeted part of the city, and other groups as specified by each finance agency. With the help of this type of agency, you may be given a below market interest rate, down payment help and other benefits. These types of agencies may help you with a lower interest rate, help with your down payment, and offer other advantages. The central goal of not-for-profit housing finance agencies is promoting residence ownership in particular places.

Explore no-down and low-down mortgages.

• Federal Housing Administration (FHA) loans

  The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays a significant part in aiding low to moderate-income Americans qualify for mortgages. 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 private lenders, ensuring the buyers are eligible for a mortgage. Down payment amounts for FHA mortgages are lower than those for typical mortgage loans, even though these mortgages come with average interest rates. The down payment may go as low as three percent and the closing costs could be packaged in the mortgage.

• VA mortgage loans

  VA loans are guaranteed by the U.S. Department of Veterans Affairs. Veterens and service people qualify for a VA loan, which generally offers a competitive fixed rate of interest, no down payment, and reduced closing costs. Even though the VA doesn't provide the mortgages, it does certify eligibility to apply for a VA loan.

• Piggy-back loans

  You may finance a down payment with a second mortgage that closes along with the first. Generally the first mortgage is for 80% of the purchase price and the "piggyback" funds 10%. The homebuyer covers the remaining 10%, rather than putting the typical 20% down payment.

• Carry-Back loans

  In the case of a seller "carrying back a second mortgage," the you borrow a portion of the seller's home equity.. The buyer funds the highest percentage of the purchase price through a traditional mortgage program and borrows the remaining funds from the seller. Often, this form of second mortgage will have higher interest.

No matter how you gather your down payment money, the thrill of owning your own home will be just as great!

Need to talk about your down payment? Call us at 7072522700.