Building Your Down Payment

Lots of buyers can easily qualify for various loan programs, but they can't afford a large down payment. Here are a few methods that will help you put together your down payment

Slash the budget and build up savings. Look for ways you can trim your expenses to put away money for a down payment. You might also try enrolling in an automatic savings plan at your bank to have a portion of your payroll automatically transferred into your savings account. You would be wise to look into some big expenses in your budget that you can live without, or trim, at least temporarily. Here are a couple of examples: you might decide to move into less expensive housing, or stay local for your annual vacation.

Work more and sell things you do not need. Look for an additional job. This can be rough, but the temporary trial can help you get your down payment. You can also get serious about the possessions you actually need and the things you could be able to put up for sale. Multiple small items may add up to a nice sum at a garage or tag sale. Also, you can consider selling any investments you own.

Tap into retirement funds. Research the details for your particular plan. You can pull out money from a 401(k) for you down payment or withdraw from an Individual Retirement Account. You will need to ensure you understand about any penalties, the way this could affect on income taxes, and repayment obligation.

Ask for a gift from your family. Many buyers somtimes get down payment help from giving parents and other family members who may be prepared to help them get into their first home. Your family members may be willing to help you reach the milestone of owning your first home.

Learn about housing finance agencies. Special mortgate loan programs are extended to homebuyers in certain situations, such as low income homebuyers or buyers planning to remodel homes in a particular neighborhood, among others. With the help of this type of agency, you probably will get an interest rate that is below market, down payment help and other benefits. These kinds of agencies may help eligible homebuyers with a lower rate of interest, help with your down payment, and offer other benefits. These non-profit programs exist to build up community in certain areas.

Learn about low-down and no-down mortgage loan programs.

• FHA mortgage loans

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important 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) helps individuals get FHA aids first-time homebuyers and others who might not be able to qualify for a traditional mortgage by themselves, by offering mortgage insurance to private lenders. Down payment sums for FHA loans are smaller than those of traditional mortgages, even though these mortgages come with average interest rates. Closing costs might be financed within the mortgage, and the down payment can be as low as 3 percent of the total amount.

• VA loans

  VA loans are guaranteed by the Department of Veterans Affairs. Veterens and service people can receive a VA loan, which generally offers a low fixed rate of interest, no down payment, and reduced closing costs. Even though the loans don't originate from the VA, the department verfifies borrowers by providing eligibility certificates.

• Piggy-back loans

  You can fund your down payment through a second mortgage that closes along with the first. Generally the piggyback loan is for 10 percent of the purchase amount, and the first mortgage covers 80 percent. The homebuyer covers the remaining 10%, rather than having to put together the typical 20% down payment.

• Carry-Back loans

  We a seller carries back a second mortgage, the seller loans you part of his or her home equity. In this scenario, you would finance the majority of the purchase price with a traditional mortgage lending institution and finance the remaining amount with the seller. Typically you'll pay a somewhat higher rate on the loan financed by the seller.

No matter how you gather down payment funds, the satisfaction of living in your own home will be just as sweet!

Need to talk about down payments? Give us a call: 2148657442.