Putting Together Your Down Payment

Lots of borrowers can easily qualify for several different kinds of mortgages, but they don't have a lot of money to pay the standard down payment. Below are a few straightforward ways to put together your down payment

Tighten your belt and save. Turn your budget upside-down to find extra money to go toward your down payment. There are bank programs through which some of your paycheck is automatically placed into a savings account each pay period. Some effective ways to put together funds include moving into housing that is less expensive, and skipping your vacation for a year or two.

Work more and sell things you do not need. Maybe you can find a second job to get your down payment money. Additionally, you can put together a comprehensive list of things you may be able to sell. Unworn gold jewelry can be sold at local jewelry stores. A closetful of small items might add up to a fair amount at a garage or tag sale. Also, you might want to look into selling any investments you own.

Borrow from a retirement plan. Explore the details of your individual plan. It is possible to take out funds from a 401(k) for you down payment or withdraw from an Individual Retirement Account. Make sure you understand about any penalties, the way this could affect on taxes, and repayment obligation.

Request a generous gift from your family. Many homebuyers somtimes receive help with their down payment assistance from gracious family members who are able to help them get into their own home. Your family members may be willing to help you reach the goal of buying your own home.

Learn about housing finance agencies. Provisional mortgage programs are offered to homebuyers in certain situations, like low income homebuyers or people planning to improve houses in a certain part of town, among others. With the help of a housing finance agency, you probably will be given an interest rate that is below market, down payment help and other advantages. These types of agencies can assist eligible buyers with a lower rate of interest, get you your down payment, and provide other advantages. These non-profit programs exist to promote the value of homes in certain places.

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

• Federal Housing Administration (FHA) mortgages

  The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in aiding low to moderate-income individuals qualify for mortgage loans. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA provides mortgage insurance to the private lenders, enabling buyers who will not be eligible for a conventional mortgage loan, to receive a mortgage. Down payment sums for FHA mortgages are less than those with conventional mortgages, even though these mortgages come with average rates of interest. The required down payment can go as low as 3 percent while the closing costs could be packaged in the mortgage.

• VA mortgages

  VA loans are guaranteed by the U.S. Department of Veterans Affairs. Service persons and veterans can get a VA loan, which typically offers a competitive fixed interest rate, no down payment, and reduced closing costs. While the VA does not actually finance the loans, it does certify eligibility to apply for a VA loan.

• Piggy-back loans

  You can finance a down payment through a second mortgage that closes with the first. In most cases the first mortgage covers 80% of the purchase price and the "piggyback" funds 10%. In contrast to the traditional 20 percent down payment, the homebuyer will just have to pull together the remaining 10 percent.

• Carry-Back loans

  In a "carry back" agreement, the seller commits to lend you part of his own equity to help you get your down payment money. The buyer funds most of the purchase price with a traditional mortgage program and borrows the remainder from the seller. Usually you will pay a slightly higher interest rate with the loan from the seller.

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

Want to discuss down payments? Give us a call: 7072522700.