Your Down Payment

Many people who are looking to purchase a new home qualify for various loan programs, but they don't have much to pay a down payment. Below are a few straightforward methods that will help you put together your down payment

Slash the budget and build up savings. Look for ways to reduce your expenses to put away money for a down payment. Also, you can look into bank programs through which a specific portion of your paycheck is automatically transferred into savings each pay period. Some effective approaches to build up 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. Maybe you can find an additional job to get your down payment money. You can also get creative about the items you migh be able to put up for sale. A closetful of small items may add up to a fair amount at a garage or tag sale. You might also look into what any investments you hold may sell for.

Borrow from your retirement funds. Explore the details of your particular plan. Many homebuyers get down payment money by withdrawing what they need from their IRAs or getting money out of their 401(k) plans. Make sure you understand about any penalties, the way this could affect on your income taxes, and repayment terms.

Ask for help from members of your family. First-time homebuyers are sometimes fortunate enough to get down payment assistance from thoughtful parents and other family members who may be anxious to help them get into their first home. Your family members may be inclined to help you reach the goal of buying your own home.

Research housing finance agencies. These agencies provide provisional mortgage loans to moderate and low income buyers, buyers with an interest in remodeling a house in a specific part of the city, and additional certain kinds of buyers as specified by each agency. Working through a housing finance agency, you can be given a below market interest rate, down payment help and other perks. These types of agencies may assist you with a reduced rate of interest, help with your down payment, and provide other assistance. These non-profit programs were established to build up the value of homes in certain areas.

Find out about low-down and no-down mortgage loan programs.

• Federal Housing Administration (FHA) mortgages

  The Federal Housing Administration (FHA), which is inside the U.S. Department of Housing and Urban Development (HUD), plays a significant role in helping low to moderate-income individuals get mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals who wish to get mortgage loans. FHA provides mortgage insurance to the private lenders, enabling new homebuyers who might not be eligible for a traditional loan, to get a mortgage. Interest rates with an FHA mortgage normally feature the current interest rate, but the down payment requirements for an FHA mortgage are below those of conventional loans. The down payment may be as low as three percent while the closing costs could be financed in the mortgage loan.

• VA mortgages

  VA loans are backed by the U.S. Department of Veterans Affairs. Veterens and service people can receive a VA loan, which usually offers a competitive fixed rate of interest, no down payment, and limited closing costs. Although the VA doesn't actually finance the loans, it does issue a certificate of eligibility to qualify for a VA loan.

• Piggy-back loans

  You may finance a down payment using a second mortgage that closes at the same time as the first. Usually the piggyback loan is for 10 percent of the purchase amount, while the first mortgage finances 80 percent. The homebuyer pays the remaining 10%, instead of putting the usual 20% down payment.

• Carry-Back loans

  With a carry-back mortgage, the seller loans you part of his or her equity. The buyer finances most of the purchase price with a traditional mortgage program and borrows the remaining funds from the seller. Typically, this form of second mortgage has a higher rate of interest.

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

Need to talk about the best options for down payments? Call us at 866-300-1550.