Your Down Payment

Many borrowers can qualify for several different kinds of mortgages, but they can't afford a large down payment. Want to look into getting a new house, but aren't sure how to put together your down payment?

Tighten your belt and save. Be on the look-out for ways you can trim your expenses to save toward a down payment. You could also decide to enroll in an automatic savings plan at your bank to automatically have a specific amount from your take-home pay deposited into your savings account. Some practical methods to build up funds include moving into less expensive housing, and staying home for your family vacation this year.

Work more and sell items you do not need. Try to get an additional job. This can be rough, but the temporary difficulty can provide your down payment money. Additionally, you can put together an exhaustive inventory of things you may be able to sell. Unworn gold jewelry can be sold at local jewelry stores. You might own desirable items you can put up for sale at an auction website, or quality household goods for a tag or garage sale. Also, you might want to consider selling any investments you own.

Borrow money from your retirement plan. Research the details for your particular plan. Some people get down payment money from withdrawing from their IRAs or pulling funds out of their 401(k) plans. Be sure you are clear about any penalties, the effect this may have on income taxes, and repayment obligation.

Ask for a generous gift from your family. First-time homebuyers are often lucky enough to get down payment help from caring family members who may be able to help them get into their first home. Your family members may be willing to help you reach the milestone of buying your own home.

Contact housing finance agencies. These types of agencies offer special mortgage programs to low and moderate-income buyers, buyers interested in renovating a house within a particular area, and other groups as defined by the agency. Working with a housing finance agency, you may be given an interest rate that is below market, down payment help and other benefits. These kinds of agencies can assist eligible homebuyers with a reduced interest rate, get you your down payment, and provide other assistance. The primary mission of non-profit housing finance agencies is to promote residential ownership in targeted places.

Learn about low-down and no-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 vital part in assisting low to moderate-income individuals get mortgages. Part 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, making the buyers eligible for a home loan. Interest rates for an FHA loan typically feature the going interest rate, while the down payment with an FHA mortgage will be lower than those of conventional loans. Closing costs can be included in the mortgage, while your down payment might be as low as 3% of the total amount.

• VA loans

  With a guarantee from the Department of Veterans Affairs, a VA loan is offered to service people and veterans. This special loan does not require a down payment, has limited closing costs, and provides the benefit of a competitive rate of interest. While the loans are not actually provided by the VA, the department verfifies borrowers by issuing eligibility certificates.

• Piggy-back loans

  You can finance your down payment using a second mortgage that closes along with the first. Most of the time, the first mortgage is for 80% of the purchase amount and the "piggyback" funds 10%. The homebuyer covers the remaining 10%, instead of come up with the usual 20% down payment.

• Carry-Back loans

  In a "carry back" agreement, the seller agrees to lend you part of his home equity to assist you with your down payment money. The buyer finances most of the purchase price through a traditional mortgage program and finances the remaining funds with the seller. Typically, this form of second mortgage will have a higher rate of interest.

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

Want to discuss your down payment? Give us a call at 2148657442.