Putting Together Your Down Payment

Lots of folks who would like to buy a new home can qualify for a mortgage loan, but they don't have a lot of money to pay the standard down payment. We have a few ideas

Cut expenses and save. Be on the look-out for ways you can trim your monthly expenditures to set aside funds for a down payment. There are bank programs in which some of your take-home pay is automatically transferred into a savings account every pay period. You would be wise to look into some big expenses in your budget that you can give up, or reduce, at least temporarily. For example, you may decide to move into less expensive housing, or skip a family vacation.

Work more and sell things you do not need. Perhaps you can get an additional job and build up your earnings. Additionally, you can put together an exhaustive inventory of things you may be able to sell. Unworn gold jewelry can be sold at local jewelers. Maybe you own collectibles you can put up for sale on an online auction, or household items for a garage or tag sale. You could also research what any investments you own may sell for.

Borrow from retirement funds. Check the provisions of your specific plan. It is possible to pull out money from a 401(k) plan for you down payment or perform a withdrawal from an IRA. You will need to ensure you know about any penalties, the effect this could have on taxes, and repayment terms.

Ask for assistance from generous members of your family. Many buyers somtimes get help with their down payment help from giving parents and other family members who are prepared to help get them in their first home. Your family members may be eager to help you reach the milestone of buying your first home.

Research housing finance agencies. Provisional loan programs are given to buyers in specific situations, like low income buyers or buyers planning to renovating homes in a specific area, among others. Financing through this kind of agency, you probably will get a below market interest rate, down payment help and other perks. These kinds of agencies may assist eligible homebuyers with a lower rate of interest, get you your down payment, and offer other benefits. The main goal of non-profit housing finance agencies is to boost home ownership in targeted areas.

Explore no-down and low-down mortgages.

• Federal Housing Administration (FHA) mortgages

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a significant part in helping low and moderate-income buyers qualify for mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals in qualifying for mortgage loans. FHA helps first-time homebuyers and others who may not be eligible for a traditional loan by themselves, by providing mortgage insurance to the private lenders. Down payment requirements for FHA loans are smaller than those of traditional mortgage loans, even though these mortgages come with current interest rates. The down payment can go as low as 3 percent while the closing costs might be covered by the mortgage loan.

• VA mortgages

  With a guarantee from the Department of Veterans Affairs, a VA loan assists service people and veterans. This special loan requires no down payment, has reduced closing costs, and provides the benefit of a competitive rate of interest. Even though the mortgage loans don't originate from the VA, the department certifies applicants by providing eligibility certificates.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes along with the first. Usually the piggyback loan takes care of 10 percent of the purchase price, while the first mortgage finances 80 percent. Instead of 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" mortgage, the seller commits to lend you part of his own equity to assist you with your down payment money. The buyer funds most of the purchase price with a traditional mortgage program and finances the remaining funds with the seller. Usually you'll pay a somewhat higher rate on the loan financed by the seller.

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

Need to talk about your down payment? Call us at 9722039033.