Your Down Payment

Many borrowers can qualify for several different kinds of mortgages, but they can't afford a large down payment. Do you want to look into getting a new home, but don't know how to put together a down payment?

Tighten your belt and save. Look for ways you can trim your monthly expenditures to set aside money for a down payment. Also, you can look into bank programs in which a portion of your paycheck is automatically deposited into a savings account every pay period. You might look into some big expenses in your spending history that you can give up, or reduce, at least temporarily. For example, you may move into less expensive housing, or skip a vacation.

Work a second job and sell items you do not need. Perhaps you can find an additional job and save your earnings. You can also get serious about the possessions you really need and the items you can sell. Multiple small things might add up to a fair amount at a garage or tag sale. Also, you can look into selling any investments you hold.

Borrow funds from your retirement plan. Explore the specifics of your individual plan. You may borrow money from a 401(k) plan for a down payment or withdraw from an Individual Retirement Account. Be sure you understand the tax ramifications, repayment terms, and any early withdrawal penalties.

Ask for help from family members. Many homebuyers somtimes receive help with their down payment help from thoughtful 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 goal of having your first home.

Learn about housing finance agencies. These types of agencies offer provisional mortgage loans to moderate and low income homebuyers, buyers interested in rehabilitating a house within a targeted area, and other particular kinds of buyers as defined by the agency. With the help of a housing finance agency, you can receive a below market interest rate, down payment assistance and other incentives. Housing finance agencies may assist you with a reduced interest rate, get you your down payment, and provide other advantages. These non-profit programs were established to promote home ownership in specific areas.

Learn about low-down and no-down mortgage loans.

• FHA mortgages

  The Federal Housing Administration (FHA), which is inside the U.S. Department of Housing and Urban Development (HUD), plays a significant part in aiding low and moderate-income buyers get mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers who wish to get home financing. FHA helps first-time buyers and others who may not be eligible for a traditional loan by themselves, by providing mortgage insurance to the private lenders. Interest rates with an FHA mortgage usually feature the market interest rate, but the down payment with an FHA mortgage will be smaller than those of conventional loans. Closing costs might be covered by the mortgage, while your down payment may be as low as 3% of the purchase price.

• VA mortgages

  With a guarantee from the Department of Veterans Affairs, a VA loan qualifies veterens and service people. This specialized loan does not require a down payment, has reduced closing costs, and provides a competitive interest rate. While the VA doesn't provide the loans, it does issue a certificate of eligibility to qualify for a VA loan.

• Piggy-back loans

  You may finance your down payment using a second mortgage that closes at the same time as the first. Most of the time, the piggyback loan is for 10 percent of the purchase price, and the first mortgage covers 80 percent. In contrast to the usual 20 percent down payment, the homebuyer just has to cover the remaining 10 percent.

• Carry-Back loans

  In the option of a seller "carrying back a second mortgage," the seller loans you part of his or her home equity. The buyer funds most of the purchase price through a traditional mortgage program and finances the remaining funds with the seller. Typically, this kind of second mortgage will have higher interest.

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

Need to talk about down payments? Give us a call at 3149139678.