Your Down Payment

Many folks who would like to buy a new house can easily qualify for a mortgage loan, but they don't have a lot of money to put up a down payment. We have a few suggestions

Slash the budget and build up savings. Turn your budget inside out to uncover extra money to go toward your down payment. There are bank programs in which a specific portion of your paycheck is automatically transferred into a savings account each pay period. Some practical methods to build up funds include moving into housing that is less expensive, and skipping your vacation for a year or two.

Work a second job and sell items you do not need. Maybe you can find an additional job to get your down payment money. Additionally, you can put together a comprehensive inventory of things you may be able to sell. Unused gold jewelry can be sold at local jewelry stores. Multiple small things could add up to a nice sum at a garage or tag sale. You could also explore what your investments could bring if sold.

Borrow from your retirement funds. Research the specifics of your particular plan. Many homebuyers get down payment money from withdrawing what they need from Individual Retirement Accounts or borrowing from 401(k) plans. Be sure you understand the tax ramifications, repayment terms, and any penalties for withdrawing early.

Ask for a gift from your family. Many homebuyers are often fortunate enough to get down payment assistance from giving family members who may be able to help them get into their first home. Your family members may be willing to help you reach the milestone of having your own home.

Learn about housing finance agencies. These types of agencies offer special loan programs for moderate and low income buyers, buyers interested in sprucing up a home in a targeted area, and other groups as defined by the finance agency. Working with this type of agency, you can be given a below market interest rate, down payment help and other benefits. Housing finance agencies can assist eligible buyers with a reduced rate of interest, get you your down payment, and provide other benefits. The primary mission of not-for-profit housing finance agencies is to promote the purchase of homes in particular places.

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

• FHA loans

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in assisting low and moderate-income families qualify for mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals who need to get mortgages. FHA provides mortgage insurance to private lenders, enabling homebuyers who will not be eligible for a conventional mortgage, to obtain a mortgage. Interest rates for an FHA loan are generally the current interest rate, while the down payment requirements with an FHA loan are lower than those of conventional loans. The down payment may go as low as three percent and the closing costs may be financed in the mortgage loan.

• VA mortgages

  VA loans are guaranteed by the Department of Veterans Affairs. Veterens and service people can benefit from a VA loan, which usually offers a low fixed rate of interest, no down payment, and limited closing costs. While it's true that the loans don't originate from the VA, the office certifies borrowers by providing eligibility certificates.

• Piggy-back loans

  You may fund a down payment using a second mortgage that closes with the first. In most cases the first mortgage is for 80% of the purchase amount and the "piggyback" funds 10%. The borrower covers the remaining 10%, instead of putting the typical 20% down payment.

• Carry-Back loans

  In a "carry back" situation, the seller commits to loan you a portion of his own equity to help you with your down payment money. The buyer finances most of the purchase price through a traditional mortgage program and borrows the remaining funds from the seller. Typically you will pay a somewhat higher rate on the loan financed by the seller.

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

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