Your Down Payment

Many buyers can qualify for a loan, but they don't have a lot of cash to pay a down payment. Do you want to buy a new house, but don't know how you should get together your down payment?

Slash the budget and build up savings. Scrutinize the budget to find extra money to go toward your down payment. Also, you can look into bank programs through which some of your take-home pay is automatically deposited into a savings account each pay period. You might look into some big expenses in your budget that you can live without, or reduce, at least temporarily. For example, you may decide to move into less expensive housing, or stay close to home for your annual vacation.

Sell things you don't need and get a part-time job. Maybe you can get an additional job and build up your earnings. You can also get creative about the items you may be able to put up for sale. You may have collectibles you can sell on an auction website, or household goods for a tag or garage sale. Also, you might want to consider selling any investments you hold.

Tap into retirement funds. Investigate the parameters of your retirement plan. Many people get down payment money from withdrawing what they need from their IRAs or borrowing from 401(k) plans. Make sure you understand the tax consequences, your obligation for repayment, and any early withdrawal penalties.

Ask for help from generous members of your family. Many buyers somtimes receive help with their down payment assistance from gracious parents and other family members who are anxious to help them get into their first home. Your family members may be happy at the chance to help you reach the milestone of owning your first home.

Contact housing finance agencies. Provisional mortgate loan programs are offered to buyers in certain circumstances, like low income homebuyers or buyers planning to remodel homes in a specific area, among others. With the help of a housing finance agency, you may be given a below market interest rate, down payment help and other benefits. Housing finance agencies may assist you with a lower interest rate, help with your down payment, and provide other assistance. These non-profit agencies to build up home ownership in certain places.

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

• Federal Housing Administration (FHA) loans

  The Federal Housing Administration (FHA), which is inside the U.S. Department of Housing and Urban Development (HUD), plays a vital part in helping low to moderate-income individuals get mortgage loans. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA helps first-time buyers and others who may not be eligible for a typical mortgage by themselves, by providing mortgage insurance to lenders. Down payment requirements for FHA loans are lower than those of conventional mortgage loans, although these mortgages hold average rates of interest. Closing costs may be financed in the mortgage, and your down payment may be as low as 3 percent of the purchase price.

• VA loans

  VA loans are backed by the U.S. Department of Veterans Affairs. Service persons and veterans can benefit from a VA loan, which usually offers a low interest rate, no down payment, and minimal closing costs. Even though the loans don't originate from the VA, the office verfifies applicants by issuing eligibility certificates.

• Piggy-back loans

  You can fund a down payment through a second mortgage that closes along with the first. Generally 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 putting the typical 20% down payment.

• Carry-Back loans

  We a seller carries back a second 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 lender and finance the remainder with the seller. Generally, this type of second mortgage has higher interest.

No matter how you gather your down payment, the thrill of reaching the goal of living in your own home will be just as great!

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