Your Down Payment

Lots of borrowers can easily qualify for several different kinds of mortgages, but they don't have a lot of money to put up the standard down payment. Do you want to buy a new house, but don't know how to get together your down payment?

Tighten your belt and save. Turn your budget inside out to find extra money to go toward your down payment. There are bank programs through which some of your paycheck is automatically deposited into savings each pay period. You would be wise to 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 may move into less expensive housing, or stay local for your annual vacation.

Sell things you don't need and get a second job. Perhaps you can get an additional job and build up your earnings. You can also get creative about the items you can put up for sale. You might own desirable items you can put up for sale at an auction website, or household items for a garage or tag sale. Also, you might want to consider selling any investments you own.

Tap into retirement funds. Explore the specifics for your individual plan. It is possible to borrow funds from a 401(k) plan for a down payment or make a withdrawal from an Individual Retirement Account. Be sure to find out about the tax ramifications, repayment terms, and penalties for withdrawing early.

Ask for assistance from generous members of your family. Many homebuyers are sometimes fortunate enough to get help with their down payment assistance from gracious parents and other family members who may be able to help get them in their first home. Your family members may be inclined to help you reach the goal of owning your first home.

Learn about housing finance agencies. These agencies extend special loan programs to low and moderate-income homebuyers, buyers interested in sprucing up a house within a targeted area, and other particular types of buyers as specified by each finance agency. Financing with this kind of agency, you can get an interest rate that is below market, down payment assistance and other perks. Housing finance agencies can help you with a reduced interest rate, get you your down payment, and provide other benefits. The central purpose of not-for-profit housing finance agencies is boosting home ownership in specific parts of the city.

Explore no-down and low-down mortgages.

• FHA mortgage loans

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a vital part in helping low to moderate-income families qualify for mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA offers mortgage insurance to private lenders, enabling homebuyers who might not be eligible for a traditional loan, to get a mortgage. Down payment requirements for FHA mortgages are less than those for conventional mortgage loans, although these loans have current interest rates. The required down payment can be as low as three percent and the closing costs might be covered by the mortgage loan.

• VA mortgages

  VA loans are backed by the U.S. Department of Veterans Affairs. Veterens and service people can get a VA loan, which typically offers a reasonable interest rate, no down payment, and limited closing costs. Although the mortgage loans aren't actually provided by the VA, the department certifies applicants by providing eligibility certificates.

• Piggy-back loans

  A piggy-back loan is a second mortgage that you close at the same time as the first. Usually the first mortgage covers 80% of the cost of the home and the "piggyback" is for 10%. The borrower pays the remaining 10%, instead of having to put together the typical 20% down payment.

• Carry-Back loans

  We a seller carries back a second mortgage, the you borrow a portion of the seller's home equity.. The buyer funds the majority of the purchase price with a traditional mortgage program and borrows the remainder from the seller. Typically you'll pay a somewhat higher interest rate with the loan financed by the seller.

No matter your method of getting together your down payment, the thrill of reaching the goal of living in your own home will be just as sweet!

Need to talk about the best options for down payments? Call us at (562) 693-5048.