Your Down Payment

Many folks who would like to buy a new house can easily qualify for a mortgage loan, but they can't afford a large down payment. Here are a few straightforward ways to get together your down payment

Cut expenses and save. Scrutinize your budget to uncover extra money to save for your down payment. Also, you can look into bank programs in which some of your paycheck is automatically transferred into a savings account each pay period. You might look into some big expenses in your budget that you can give up, or reduce, at least temporarily. For example, you may move into less expensive housing, or skip a vacation.

Sell items you don't really need and get a second job. Maybe you can get a second job to get your down payment money. Additionally, you can put together an exhaustive list of items you may be able to sell. Unworn gold jewelry can be sold at local jewelers. A closetful of small items may add up to a fair amount at a garage or tag sale. Also, you can consider selling any investments you hold.

Borrow funds from a retirement plan. Check the provisions of your retirement plan. It is possible to take out money from a 401(k) for a down payment or withdraw from an Individual Retirement Account. You will want to ensure you understand about any penalties, the way this will affect on your taxes, and repayment obligation.

Ask for a gift from family. Many buyers somtimes receive help with their down payment help from caring parents and other family members who are eager to help them get into their first home. Your family members may be pleased to help you reach the milestone of buying your own home.

Contact housing finance agencies. Special mortgate loan programs are provided to homebuyers in certain situations, such as low income buyers or homebuyers planning to improve houses in a particular neighborhood, among others. Financing through a housing finance agency, you can be given a below market interest rate, down payment assistance and other incentives. Housing finance agencies may help you with a lower rate of interest, get you your down payment, and provide other advantages. The primary goal of non-profit housing finance agencies is to promote residential ownership in specific parts of the city.

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 an important role in aiding low and moderate-income Americans qualify for mortgage loans. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals in getting mortgages. FHA provides mortgage insurance to private lenders, enabling homebuyers who may not be eligible for a traditional mortgage loan, to receive home financing. Down payment sums for FHA mortgages are below those with conventional mortgages, although these mortgages have current rates of interest. The required down payment may be as low as 3 percent and the closing costs could be covered by the mortgage loan.

• VA loans

  With a guarantee from the Department of Veterans Affairs, a VA loan qualifies veterens and service people. This specialized loan requires no down payment, has reduced closing costs, and provides a competitive rate of interest. While it's true that the mortgage loans are not actually provided by the VA, the office verfifies applicants by providing eligibility certificates.

• Piggy-back loans

  You may fund a down payment with a second mortgage that closes at the same time as the first. In most cases the first mortgage is for 80% of the purchase price and the "piggyback" funds 10%. The borrower pays the remaining 10%, rather than having to put together the typical 20% down payment.

• Carry-Back loans

  With a carry-back mortgage, the seller loans you part of his or her equity. In this scenario, you would borrow the largest portion of the purchase price from a traditional mortgage lending institution and borrow the remainder from the seller. Usually you'll pay a somewhat higher rate on the loan financed by the seller.

No matter your strategy of getting together your down payment, the thrill of reaching the goal of living in your own home will be just as great!

Need to talk about down payments? Call us at 9722039033.