Your Down Payment

Many borrowers qualify for various loan programs, but they don't have a lot of money to put up a down payment. Do you want to buy a new house, but don't know how to put together a down payment?

Tighten your belt and save. Scrutinize the budget to uncover extra money to go toward your down payment. There are bank programs through which a portion of your paycheck is automatically placed into a savings account every pay period. Some practical approaches to build up funds include moving into less expensive housing, and skipping your vacation for a year or two.

Work a second job and sell things you do not need. Try to find an additional job. This can be rough, but the temporary trial can provide your down payment money. In addition, you can make an exhaustive list of things you can sell. Unused gold jewelry can be sold at local jewelers. Maybe you have collectibles you can put up for sale on an auction website, or quality household items for a garage or tag sale. You can also look into what your investments could bring if sold.

Borrow your down payment from a retirement plan. Check the parameters of your retirement plan. Some people get down payment money from withdrawing from their IRAs or borrowing from 401(k) plans. Be sure to learn about the tax ramifications, your obligation for repayment, and possible penalties for withdrawing early.

Ask for a generous gift from your family. Many homebuyers are often fortunate enough to receive help with their down payment assistance from thoughtful parents and other family members who may be able to help them get into their own home. Your family members may be eager to help you reach the goal of buying your own home.

Contact housing finance agencies. Provisional mortgate loan programs are extended to buyers in certain circumstances, like low income buyers or future homeowners planning to remodel homes in a specific part of town, among others. Financing through this kind of agency, you can get a below market interest rate, down payment help and other incentives. These kinds of agencies may assist you with a lower interest rate, help with your down payment, and provide other assistance. These non-profit programs were formed to promote community in certain areas.

Explore no-down and low-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 assisting low to moderate-income Americans qualify for mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals in qualifying for mortgage loans. FHA provides mortgage insurance to the private lenders, enabling buyers who might not qualify for a typical loan, to obtain financing. Interest rates with an FHA mortgage are normally the going interest rate, but the down payment requirements for an FHA mortgage will be lower than those of conventional loans. The required down payment may be as low as three percent and the closing costs may be covered by the mortgage.

• VA loans

  With a guarantee from the Department of Veterans Affairs, a VA loan assists service people and veterans. This specialized loan requires no down payment, has mimimal closing costs, and offers a competitive interest rate. Although the mortgages aren't actually provided by the VA, the department certifies borrowers by issuing eligibility certificates.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes with the first. Usually the piggyback loan is for 10 percent of the purchase amount, and the first mortgage finances 80 percent. Rather than the usual 20 percent down payment, the homebuyer will just have to pull together the remaining 10 percent.

• Carry-Back loans

  In the option of the seller "carrying back a second mortgage," the seller loans you part of his or her home equity. The buyer funds the highest percentage of the purchase price through a traditional mortgage program and finances the remaining funds with the seller. Usually this type of second mortgage has a higher rate of interest.

The satisfaction will be the same, no matter how you manage to come up with the down payment. Your new home will be your reward!

Need to talk about your down payment? Give us a call: 7072522700.