Your Down Payment

Many borrowers qualify for a mortgage loan, but they don't have much to pay a down payment. Want to look into getting a new house, but don't know how to put together your down payment?

Tighten your belt and save. Be on the look-out for ways you can trim your expenditures to set aside money for a down payment. There are bank programs in 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 do without, or trim, at least temporarily. Here are a couple of examples: you may move into less expensive housing, or skip a family vacation.

Sell things you do not really need and find a part-time job. Perhaps you can find an additional job and build up your earnings. You can also seriously consider the possessions you actually need and the things you can put up for sale. You may own collectibles you can put up for sale at an online auction, or household goods for a garage or tag sale. Also, you might want to think about selling any investments you own.

Borrow from a retirement plan. Investigate the parameters of your particular plan. It is possible to pull out money from a 401(k) plan for a down payment or get a withdrawal from an Individual Retirement Account. Be sure you understand the tax ramifications, your obligation for repaying the money, and early withdrawal penalties.

Ask for assistance from generous members of your family. Many homebuyers are often lucky enough to get help with their down payment help from thoughtful parents and other family members who may be prepared to help get them in their own home. Your family members may be happy at the chance to help you reach the milestone of buying your first home.

Research housing finance agencies. Provisional mortgage programs are extended to homebuyers in specific circumstances, such as low income buyers or people planning to renovating homes in a targeted place, among others. With the help of a housing finance agency, you may receive a below market interest rate, down payment assistance and other benefits. Housing finance agencies may assist you with a lower interest rate, get you your down payment, and provide other benefits. These non-profit programs to boost the value of homes in specific places.

Research 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 critical part in helping low and moderate-income families get mortgages. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids homebuyers who wish to qualify for home financing. FHA helps first-time homebuyers and others who would not be able to qualify for a traditional mortgage loan by themselves, by providing mortgage insurance to the private lenders. Interest rates for an FHA mortgage are typically the going interest rate, while the down payment amounts with an FHA mortgage will be lower than those of conventional loans. The down payment can be as low as 3 percent and the closing costs might be packaged in the mortgage.

• VA mortgages

  Guaranteed by the Department of Veterans Affairs, a VA loan is offered to service people and veterans. This specialized loan does not require a down payment, has reduced closing costs, and provides the advantage of a competitive interest rate. While the VA does not finance the loans, it does issue a certificate of eligibility to qualify for a VA loan.

• Piggy-back loans

  A piggy-back loan is a second mortgage that you close along with the first. Most of the time, the first mortgage covers 80% of the cost of the home and the "piggyback" funds 10%. Instead of the traditional 20 percent down payment, the homebuyer just has to cover the remaining 10 percent.

• Carry-Back loans

  In a "carry back" agreement, the seller commits to loan you part of his own equity to help you get your down payment money. You would borrow the majority of the purchase price from a traditional mortgage lender and finance the remainder with the seller. Typically you will pay a slightly higher interest rate on the loan financed by the seller.

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