Your Down Payment

Many buyers can easily qualify for a loan, but they can't afford a large down payment. Below are a few ways to get together a down payment

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

Sell things you do not need and find a second job. Maybe you can find a second job and build up your earnings. You can also get creative about the things you can put up for sale. A closetful of small things could add up to a fair amount at a garage or tag sale. You could also explore what your investments may bring if sold.

Tap into retirement funds. Check the provisions of your specific program. You may borrow funds from a 401(k) plan for you down payment or withdraw from an IRA. Make sure you know about any penalties, the way this will affect on income taxes, and repayment terms.

Ask for help from family members. First-time buyers somtimes get help with their down payment assistance from thoughtful family members who are eager to help get them in their own home. Your family members may be happy at the chance to help you reach the goal of buying your first home.

Learn about housing finance agencies. These agencies offer provisional mortgate loan programs to moderate and low income buyers, buyers with an interest in sprucing up a home within a targeted part of the city, and additional groups as defined by each agency. With the help of this kind of agency, you probably will receive an interest rate that is below market, down payment assistance and other benefits. These types of agencies may help you with a lower interest rate, get you your down payment, and provide other benefits. These non-profit agencies to promote the value of homes in specific neighborhoods.

Research no-down and low-down mortgages.

• 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 role in aiding low and moderate-income Americans qualify for mortgages. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals in getting mortgage loans. FHA offers mortgage insurance to the private lenders, helping the buyers to become eligible for financing. Down payment amounts for FHA loans are below those of traditional mortgages, although these mortgages come with average rates of interest. Closing costs can be financed in the mortgage, while the down payment might be as low as 3% of the purchase price.

• VA mortgage loans

  Guaranteed by the Department of Veterans Affairs, a VA loan qualifies veterens and service people. This specialized loan requires no down payment, has limited closing costs, and offers a competitive interest rate. Even though the VA doesn't actually provide the mortgages, it does certify eligibility to qualify for a VA mortgage.

• Piggy-back loans

  You may finance your down payment with a second mortgage that closes with the first. Generally the piggyback loan takes care of 10 percent of the purchase price, and the first mortgage covers 80 percent. In contrast to the traditional 20 percent down payment, the buyer just has to cover the remaining 10 percent.

• Carry-Back loans

  In a "carry back" mortgage, the seller agrees to loan you a piece of his own equity to help you get your down payment funds. In this scenario, you would finance the majority of the purchase price with a traditional lender and finance the remaining amount with the seller. Often, this form of second mortgage has higher interest.

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

Need to talk about your down payment? Give us a call at 9254610500.