Putting Together Your Down Payment

Many buyers qualify for several different kinds of mortgages, but they don't have much to put up the standard down payment. We have a few ideas

Slash your budget and build up savings. Be on the look-out for ways you can reduce your monthly expenses to put away money for a down payment. There are bank programs through which some of your take-home pay is automatically placed into savings each pay period. You might look into some big expenses in your budget that you can live without, or trim, at least temporarily. For example, you might decide to move into less expensive housing, or stay close to home for your vacation.

Sell items you don't need and get a part-time job. Try to get a second job. This can be exhausting, but the temporary difficulty can provide your down payment money. You can also seriously consider the possessions you really need and the items you may be able to put up for sale. You might own collectibles you can sell at an auction website, or quality household goods for a garage or tag sale. You might also look into what any investments you own will sell for.

Tap into retirement funds. Investigate the parameters of your particular plan. It is possible to borrow funds from a 401(k) plan for a down payment or withdraw from an Individual Retirement Account. Make sure you understand about any penalties, the effect this could have on your taxes, and repayment obligation.

Ask for assistance from members of your family. First-time homebuyers are sometimes lucky enough to get down payment help from gracious 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.

Learn about housing finance agencies. Provisional mortgage loans are offered to homebuyers in specific circumstances, like low income purchasers or future homeowners looking to improve homes in a certain neighborhood, among others. With the help of this kind of agency, you may get an interest rate that is below market, down payment assistance and other incentives. These types of agencies may help you with a lower interest rate, help with your down payment, and offer other benefits. These non-profit programs exist to promote community in certain places.

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

• Federal Housing Administration (FHA) mortgage 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 individuals get mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers in getting home financing. FHA offers mortgage insurance to the private lenders, ensuring the buyers are eligible for a mortgage loan. Interest rates with an FHA loan typically feature the going interest rate, while the down payment requirements for an FHA mortgage are lower than those of conventional loans. The down payment may be as low as three percent while the closing costs might be packaged in the mortgage loan.

• VA mortgages

  With a guarantee from the Department of Veterans Affairs, a VA loan assists veterens and service people. This particular loan requires no down payment, has reduced closing costs, and provides the advantage of a competitive rate of interest. While the VA doesn't provide the mortgage loans, it does issue a certificate of eligibility to apply for a VA mortgage.

• Piggy-back loans

  A piggy-back loan is a second mortgage that you close along with the first. Most of the time, the piggyback loan takes care of 10 percent of the home's price, and the first mortgage covers 80 percent. The homebuyer covers the remaining 10%, rather than having to put together the typical 20% down payment.

• Carry-Back loans

  In a "carry back" mortgage, the seller agrees to lend you part of his own equity to assist you with your down payment funds. The buyer finances the majority of the purchase price through a traditional mortgage program and finances the remaining funds with the seller. Often, this form of second mortgage has higher interest.

No matter your strategy of pulling together down payment funds, the thrill of reaching the goal of owning your own home will be just as sweet!

Want to discuss down payment options? Call us at 9254610500.