Your Down Payment

Many people who would like to purchase a new home qualify for several different kinds of mortgages, but they can't afford a large down payment. Here are a few straightforward methods that will help you put together a down payment

Slash your budget and build up savings. Be on the look-out for ways you can reduce your expenditures to save toward a down payment. You also might enroll in an automatic savings plan to have a portion of your pay automatically transferred into savings. Some practical methods to save additional funds include moving into a residence that is less expensive, and skipping your vacation for a year or two.

Sell things you do not need and get a part-time job. Try to get a second job. This can be rough, but the temporary difficulty can provide your down payment money. You can also get creative about the items you may be able to sell. A closetful of small things could add up to a fair amount at a garage or tag sale. Also, you can look into selling any investments you own.

Borrow your down payment from a retirement plan. Check the provisions of your retirement program. Some people get down payment money by withdrawing funds from Individual Retirement Accounts or getting money out of 401(k) plans. You will need to make sure you are knowledgable about any penalties, the way this may affect on taxes, and repayment terms.

Ask for a gift from family. Many homebuyers are often lucky enough to receive down payment assistance from giving parents and other family members who are anxious to help get them in their own home. Your family members may be pleased to help you reach the goal of buying your first home.

Learn about housing finance agencies. These types of agencies extend provisional loan programs to moderate and low income buyers, buyers interested in rehabilitating a residence within a targeted area, and other groups as defined by each finance agency. Financing through this kind of agency, you can be given a below market interest rate, down payment assistance and other incentives. Housing finance agencies can assist you with a lower rate of interest, get you your down payment, and offer other benefits. The primary purpose of non-profit housing finance agencies is build up residence ownership in particular places.

Learn about low-down and no-down mortgages.

• Federal Housing Administration (FHA) loans

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a critical role in assisting low to moderate-income families qualify for mortgages. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA provides mortgage insurance to private lenders, ensuring the buyers are eligible for financing. Down payment sums for FHA loans are smaller than those of typical mortgages, even though these mortgages have average interest rates. The down payment may be as low as three percent while the closing costs can be covered by the mortgage loan.

• VA loans

  With a guarantee from the Department of Veterans Affairs, a VA loan is offered to service people and veterans. This specialized loan does not require a down payment, has reduced closing costs, and provides a competitive rate of interest. While the VA doesn't finance the loans, it does certify eligibility to qualify for a VA loan.

• Piggy-back loans

  You can fund a down payment with a second mortgage that closes at the same time as the first. Most of the time, the piggyback loan takes care of 10 percent of the home's amount, and the first mortgage finances 80 percent. Instead of the traditional 20 percent down payment, the buyer will just have to cover the remaining 10 percent.

• Carry-Back loans

  With a carry-back mortgage, the you borrow part of the seller's home equity.. In this scenario, you would borrow the majority of the purchase price from a traditional lending institution and finance the remaining amount with the seller. Usually you'll pay a slightly higher rate on the loan from the seller.

Want to discuss down payments? Give us a call at 9254610500.