Building Your Down Payment

Many buyers can qualify for various loan programs, but they don't have a lot of money to pay the standard down payment. Here are a few ways to get together your down payment

Reduce expenses and save. Be on the look-out for ways to reduce your expenditures to save toward a down payment. Also, you can look into bank programs in which a specific portion of your paycheck is automatically placed into a savings account every pay period. You might look into some big expenses in your spending history that you can give up, or reduce, at least temporarily. For example, you may decide to move into less expensive housing, or stay local for your annual vacation.

Work more and sell items you don't need. Try to get a second job. This can be rough, but the temporary trial can provide your down payment money. You can also get serious about the possessions you really need and the items you can sell. Maybe you own desirable items you can put up for sale on 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 funds from your retirement plan. Investigate the parameters of your retirement program. Some homebuyers get down payment money from withdrawing what they need from IRAs or taking funds out of 401(k) programs. You will need to ensure you are knowledgable about any penalties, the way this may affect on income taxes, and repayment terms.

Request a gift from family. First-time buyers are sometimes lucky enough to receive help with their down payment assistance from caring parents and other family members who may be prepared to help them get into their own home. Your family members may be willing to help you reach the milestone of buying your own home.

Research housing finance agencies. These agencies provide special mortgate loan programs- for moderate and low income homebuyers, buyers with an interest in sprucing up a home within a targeted area, and additional groups as specified by the finance agency. Working with a housing finance agency, you may be given an interest rate that is below market, down payment help and other incentives. These kinds of agencies can help you with a reduced rate of interest, get you your down payment, and provide other benefits. These non-profit agencies were established to boost the value of homes in certain neighborhoods.

Learn about low-down and no-down mortgage loan programs.

  • Federal Housing Administration (FHA) mortgages

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a vital role in assisting low and moderate-income individuals get mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers who wish to get home financing. FHA aids first-time buyers and others who might not be eligible for a conventional mortgage by themselves, by providing mortgage insurance to lenders. Interest rates for an FHA loan typically feature the current interest rate, but the down payment with an FHA mortgage are less than those of conventional loans. The required down payment can go as low as 3 percent while the closing costs can be included in the mortgage.

  • VA loans

    Guaranteed by the Department of Veterans Affairs, a VA loan is offered to veterens and service people. This specialized loan requires no down payment, has reduced closing costs, and offers a competitive rate of interest. Even though the loans aren't actually issued by the VA, the office certifies applicants by issuing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that you close along with the first. Usually the piggyback loan is for 10 percent of the purchase price, and the first mortgage covers 80 percent. Instead of the traditional 20 percent down payment, the buyer will just have to pull together 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 money. The buyer finances most of the purchase price through a traditional mortgage program and borrows the remaining funds from the seller. Typically, this form of second mortgage will have higher interest.

The feeling of accomplishment will be the same, no matter how you manage to pull together your down payment. Your brand new home will be worth it!

Need to talk about your down payment? Give us a call: 5626935048.

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Nationwide Home Loans

NMLS #238531| CA BRE #01017101

16211 Whittier Blvd.
Whittier, CA 90603