Your Down Payment

Many people who would like to purchase a new house qualify for various loan programs, but they don't have much to pay a down payment. We have a few suggestions

Slash the budget and build up savings. Look for ways you can reduce your expenditures to put away money for a down payment. Also, you can look into bank programs through which a portion of your paycheck is automatically deposited into a savings account each pay period. Some effective ways to put together funds include moving into less expensive housing, and skipping your family vacation for a year or two.

Work a second job and sell things you do not need. Look for a second job. This can be exhausting, but the temporary trial can help you get your down payment. You can also get creative about the items you can sell. Multiple small things might add up to a fair amount at a garage or tag sale. You could also look into what your investments will bring if sold.

Tap into retirement funds. Check the provisions of your particular plan. It is possible to borrow money from a 401(k) plan for you down payment or get a withdrawal from an Individual Retirement Account. Make sure to learn about the tax consequences, repayment terms, and possible early withdrawal penalties.

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

Learn about housing finance agencies. Special mortgate loan programs are given to homebuyers in specific situations, like low income purchasers or people looking to improve houses in a specific neighborhood, among others. With the help of a housing finance agency, you probably will receive an interest rate that is below market, down payment assistance and other benefits. These kinds of agencies can help you with a reduced interest rate, get you your down payment, and offer other benefits. The central mission of non-profit housing finance agencies is promoting residence ownership in particular parts of the city.

Explore no-down and low-down mortgage loan programs.

• Federal Housing Administration (FHA) loans

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a vital part in helping low to moderate-income families get mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals who wish to get home financing. FHA provides mortgage insurance to private lenders, ensuring the buyers are eligible for financing. Down payment sums for FHA mortgages are lower than those of traditional mortgages, although these loans hold current rates of interest. The required down payment can go as low as 3 percent while the closing costs may be financed in the mortgage.

• VA mortgage loans

  With a guarantee from the Department of Veterans Affairs, a VA loan qualifies veterens and service people. This special loan does not require a down payment, has mimimal closing costs, and provides the benefit of a competitive interest rate. Even though the mortgage loans don't originate from the VA, the office verfifies applicants by issuing eligibility certificates.

• Piggy-back loans

  You can fund a down payment using a second mortgage that closes along with the first. Usually the piggyback loan takes care of 10 percent of the home's price, and the first mortgage covers 80 percent. Rather than the traditional 20 percent down payment, the homebuyer just has to cover the remaining 10 percent.

• Carry-Back loans

  In a "carry back" mortgage, the seller agrees to loan you some of his own equity to help you get your down payment funds. You would borrow the largest portion of the purchase price from a traditional lender and borrow the remaining amount from the seller. Often, this kind of second mortgage has higher interest.

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

Want to discuss the best options for down payments? Give us a call at 7072522700.