Your Down Payment

Many folks who are looking to buy a new home qualify for various loan programs, but they can't afford a large down payment. Here's where to get started

Slash your budget and build up savings. Be on the look-out for ways you can trim your expenses to save toward a down payment. You could also try enrolling in an automatic savings plan to automatically have a set portion of your paycheck deposited into a savings account. Some practical ways to build up funds include moving into a residence that is less expensive, and staying home for your vacation this year.

Work a second job and sell items you do not need. Try to find an additional job. This can be exhausting, but the temporary difficulty can help you get your down payment. In addition, you can put together an exhaustive inventory of items you may be able to sell. Broken gold jewelry can be sold at local jewelers. Maybe you have desirable items you can sell on an online auction, or quality household goods for a garage or tag sale. Also, you can look into selling any investments you hold.

Tap into your retirement funds. Research the details for your individual plan. It is possible to borrow funds from a 401(k) for you down payment or withdraw from an Individual Retirement Account. You will want to ensure you understand about any penalties, the way this could affect on taxes, and repayment obligation.

Ask for assistance from generous family members. First-time buyers somtimes get down payment help from thoughtful parents and other family members who may be able to help get them in their own home. Your family members may be pleased to help you reach the milestone of buying your first home.

Research housing finance agencies. Special mortgate loan programs are given to buyers in specific situations, like low income homebuyers or people planning to remodel houses in a specific area, among others. Financing through this type of agency, you probably will receive a below market interest rate, down payment assistance and other perks. Housing finance agencies can assist you with a reduced rate of interest, get you your down payment, and provide other assistance. The principal mission of non-profit housing finance agencies is to boost residential ownership in specific places.

Research no-down and low-down mortgage loans.

• Federal Housing Administration (FHA) mortgage loans

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in aiding low to moderate-income buyers get mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids homebuyers in getting mortgages. FHA helps first-time homebuyers and others who may not be able to qualify for a conventional mortgage on their own, by providing mortgage insurance to private lenders. Down payment amounts for FHA loans are smaller than those of traditional mortgages, although these loans have current rates of interest. The down payment can go as low as three percent and the closing costs could be packaged in the mortgage.

• VA mortgage loans

  Guaranteed by the Department of Veterans Affairs, a VA loan is offered to veterens and service people. This specialized loan requires no down payment, has reduced closing costs, and provides a competitive interest rate. Even though the loans aren't actually issued by the VA, the office certifies applicants by providing eligibility certificates.

• Piggy-back loans

  You can fund a down payment with a second mortgage that closes at the same time as the first. Most of the time, the piggyback loan takes care of 10 percent of the home's price, while the first mortgage covers 80 percent. The homebuyer pays the remaining 10%, instead of putting the usual 20% down payment.

• Carry-Back loans

  In the option of a seller "carrying back a second mortgage," the you borrow part of the seller's home equity.. You would finance the majority of the purchase price with a traditional lender and borrow the remainder from the seller. Usually this kind of second mortgage will have a higher rate of interest.

The feeling of accomplishment will be the same, no matter which method you use to come up with the down payment. Your new home will be worth it!

Want to discuss down payments? Give us a call: 214-865-7442.