Your Down Payment

Many buyers qualify for a mortgage loan, but they can't afford a large down payment. We have a few suggestions

Tighten your belt and save. Turn your budget inside out to uncover extra money to save for your down payment. Also, you can look into bank programs through which some of your take-home pay is automatically placed into savings every pay period. Some effective approaches to save additional funds include moving into less expensive housing, and staying home for your vacation this year.

Work more and sell things you do not need. Look for an additional job. This can be rough, but the temporary difficulty can help you get your down payment. In addition, you can make an exhaustive list of things you may be able to sell. Unworn gold jewelry can be sold at local jewelers. You may have desirable items you can sell at an online auction, or quality household items for a garage or tag sale. You might also look into what your investments will bring if sold.

Tap into retirement funds. Investigate the provisions of your specific program. You may borrow money from a 401(k) plan for a down payment or withdraw from an IRA. You will need to ensure you are knowledgable about any penalties, the effect this may have on income taxes, and repayment terms.

Ask for a generous gift from family. First-time homebuyers are often lucky enough to get down payment help from gracious parents and other family members who may be anxious to help get them in their first home. Your family members may be inclined to help you reach the milestone of owning your own home.

Research housing finance agencies. These types of agencies offer provisional mortgage programs for moderate and low income borrowers, buyers with an interest in rehabilitating a home within a particular area, and other specific types of buyers as specified by the finance agency. Financing through this type of agency, you may get an interest rate that is below market, down payment help and other advantages. Housing finance agencies can assist eligible homebuyers with a lower rate of interest, get you your down payment, and offer other benefits. The main goal of not-for-profit housing finance agencies is to promote residential ownership in specific areas.

Explore no-down and low-down mortgage loans.

• FHA 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 mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers in getting mortgage loans. FHA assists first-time buyers and others who may not be eligible for a traditional loan by themselves, by providing mortgage insurance to the private lenders. Interest rates with an FHA loan normally feature the going interest rate, but the down payment requirements for an FHA mortgage are below those of conventional loans. Closing costs can be financed in the mortgage, and your down payment can be as low as 3 percent of the purchase price.

• VA mortgage loans

  Guaranteed by the Department of Veterans Affairs, a VA loan is offered to service people and veterans. This specialized loan requires no down payment, has limited closing costs, and provides the benefit of a competitive rate of interest. Even though the VA does not actually finance the mortgage loans, it does issue a certificate of eligibility to qualify for a VA loan.

• Piggy-back loans

  You may fund a down payment with a second mortgage that closes with the first. Usually the first mortgage is for 80% of the cost of the home and the "piggyback" is for 10%. Rather than the traditional 20 percent down payment, the homebuyer just has to cover the remaining 10 percent.

• Carry-Back loans

  In a "carry back" mortgage, the seller agrees to lend you a piece 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 borrows the remaining funds from the seller. Usually this type of second mortgage will have a higher rate of interest.

No matter how you gather your down payment funds, the satisfaction of reaching the goal of owning your own home will be just as sweet!

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