Your Down Payment

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

Tighten your belt and save. Turn your budget inside out to uncover extra money to save for your down payment. You also could enroll in an automatic savings plan to have a portion of your pay automatically transferred into a savings account. You could look into some big expenses in your spending history that you can live without, or reduce, at least temporarily. For example, you may decide to move into less expensive housing, or skip a family vacation.

Sell items you don't really need and find a part-time job. Perhaps you can get a second job to get your down payment money. In addition, you can put together an exhaustive list of things you may be able to sell. Unworn gold jewelry can bring a good price from local jewelry stores. A closetful of small items can add up to a fair amount at a garage or tag sale. You might also look into what any investments you own will bring if sold.

Borrow from your retirement funds. Explore the specifics of your individual plan. Some homebuyers get down payment money from withdrawing from Individual Retirement Accounts or pulling money out of their 401(k) plans. You will want to ensure you understand about any penalties, the effect this will have on your taxes, and repayment terms.

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

Learn about housing finance agencies. Provisional mortgage programs are offered to buyers in specific situations, such as low income buyers or homebuyers looking to improve houses in a particular place, among others. Financing with this type of agency, you probably will be given an interest rate that is below market, down payment assistance and other incentives. Housing finance agencies can help you with a reduced rate of interest, help with your down payment, and offer other advantages. The central mission of non-profit housing finance agencies is to promote residential ownership in certain parts of the city.

Find out about low-down and no-down mortgages.

• FHA mortgage loans

  The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays a vital role in assisting low and moderate-income Americans get mortgage loans. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids homebuyers who wish to qualify for home financing. FHA provides mortgage insurance to the private lenders, enabling new homebuyers who might not be eligible for a typical mortgage, to receive a mortgage. Interest rates with an FHA loan normally feature the market interest rate, but the down payment with an FHA loan are below those of conventional loans. Closing costs might be financed in the mortgage, while the down payment could be as low as 3% of the purchase price.

• VA mortgages

  With a guarantee from the Department of Veterans Affairs, a VA loan assists veterens and service people. This special loan requires no down payment, has mimimal closing costs, and offers a competitive interest rate. Even though the VA does not actually provide the loans, it does issue a certificate of eligibility to apply for a VA mortgage.

• Piggy-back loans

  You can finance a down payment using a second mortgage that closes with the first. Generally the first mortgage covers 80% of the purchase amount and the "piggyback" funds 10%. Instead of the usual 20 percent down payment, the buyer just has to pull together the remaining 10 percent.

• Carry-Back loans

  With a carry-back mortgage, the you borrow a portion of the seller's home equity.. You would borrow the largest portion of the purchase price from a traditional lending institution and finance the remainder with the seller. Typically you will pay a somewhat higher rate with the loan from the seller.

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

Want to discuss your down payment? Call us: 7072522700.