Putting Together Your Down Payment

Lots of buyers can qualify for various loan programs, but they don't have a lot of money to pay a down payment. Here are a few ideas:

Cut expenses and save. Look for ways to trim your expenses to save toward a down payment. You might also try enrolling in an automatic savings plan to automatically have a specific portion of your take-home pay moved into a savings account. You might look into some big expenses in your spending history that you can give up, or reduce, at least temporarily. Here are a couple of examples: you might decide to move into less expensive housing, or stay local for your annual vacation.

Work more and sell things you do not need. Try to get an additional job. This can be rough, but the temporary trial can help you get your down payment. In addition, you can put together an exhaustive list of things you can sell. Unused gold jewelry can be sold at local jewelry stores. Multiple small things could add up to a fair amount at a garage or tag sale. You could also look into what any investments you hold could bring if sold.

Borrow from your retirement plan. Investigate the parameters of your particular program. Some people get down payment money by withdrawing funds from IRAs or pulling money out of 401(k) programs. Be sure you are clear about any penalties, the way this will affect on your taxes, and repayment terms.

Ask for a gift from family. Many homebuyers somtimes get help with their down payment help from thoughtful parents and other family members who are willing to help them get into their own home. Your family members may be pleased at the chance to help you reach the goal of buying your own home.

Contact housing finance agencies. These agencies provide special mortgage programs for moderate and low income borrowers, buyers interested in rehabilitating a residence in a particular area, and additional particular kinds of buyers as specified by each agency. With the help of a housing finance agency, you probably will receive an interest rate that is below market, down payment assistance and other advantages. These kinds of agencies can assist eligible buyers with a reduced interest rate, get you your down payment, and provide other benefits. These non-profit agencies to promote home ownership in specific places.

Learn about low-down and no-down mortgages.

• FHA mortgage loans

  The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays a critical role in assisting 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) helps individuals get FHA offers mortgage insurance to the private lenders, enabling buyers who will not be eligible for a typical loan, to receive home financing. Interest rates with an FHA mortgage generally feature the going interest rate, but the down payment for an FHA mortgage are lower than those of conventional loans. Closing costs might be covered by the mortgage, and your down payment could be as low as 3 percent of the total.

• VA mortgages

  With a guarantee from the Department of Veterans Affairs, a VA loan assists service people and veterans. This special loan requires no down payment, has limited closing costs, and offers a competitive rate of interest. Even though the loans are not actually provided by the VA, the department certifies borrowers by providing eligibility certificates.

• Piggy-back loans

  You can fund a down payment with a second mortgage that closes at the same time as the first. Usually the piggyback loan is for 10 percent of the purchase price, while the first mortgage covers 80 percent. Rather than the usual 20 percent down payment, the homebuyer just has to pull together the remaining 10 percent.

• Carry-Back loans

  With a carry-back mortgage, the you borrow part of the seller's home equity.. The buyer funds the highest percentage of the purchase price with a traditional mortgage program and finances the remaining funds with the seller. Usually you'll pay a somewhat higher interest rate on the loan financed by the seller.

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

Want to discuss the best options for down payments? Give us a call at 5626935048.