Your Down Payment

Many borrowers can easily qualify for several different kinds of mortgages, but they can't afford a large down payment. We have a few ideas

Slash your budget and build up savings. Be on the look-out for ways you can reduce your monthly expenses to save toward a down payment. There are bank programs through which a specific portion of your take-home pay is automatically placed into a savings account each pay period. 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 skip a vacation.

Work more and sell things you do not need. Try to find an additional job. This can be rough, but the temporary trial can help you get your down payment. You can also get creative about the items you migh be able to put up for sale. A closetful of small items might add up to a fair amount at a garage or tag sale. Also, you can consider selling any investments you own.

Borrow funds from a retirement plan. Check the parameters of your specific plan. Some homebuyers get down payment money from withdrawing funds from their Individual Retirement Accounts or borrowing from 401(k) plans. You will need to be sure you know about any penalties, the effect this will have on your income taxes, and repayment obligation.

Request a generous gift from family. Many buyers somtimes get down payment help from thoughtful family members who may be anxious to help them get into their own home. Your family members may be eager to help you reach the goal of owning your first home.

Learn about housing finance agencies. These types of agencies provide special loan programs for low and moderate-income buyers, buyers with an interest in renovating a residence within a specific part of the city, and additional groups as specified by each finance agency. With the help of a housing finance agency, you can receive a below market interest rate, down payment assistance and other benefits. These kinds of agencies can assist eligible buyers with a reduced rate of interest, get you your down payment, and provide other assistance. The main goal of not-for-profit housing finance agencies is build up the purchase of homes in targeted parts of the city.

Learn about low-down and no-down mortgage loans.

• Federal Housing Administration (FHA) loans

  The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays a vital role in assisting low to moderate-income Americans get mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals in getting home financing. FHA aids first-time homebuyers and others who may not be able to qualify for a conventional loan on their own, by providing mortgage insurance to the lenders. Down payment requirements for FHA loans are below those of conventional mortgage loans, although these loans hold average interest rates. Closing costs might be included in the mortgage, and your down payment can be as low as 3 percent of the total amount.

• VA loans

  VA loans are guaranteed by the U.S. Department of Veterans Affairs. Veterens and service people can receive a VA loan, which generally offers a low rate of interest, no down payment, and limited closing costs. Although the VA doesn't actually finance the mortgages, it does issue a certificate of eligibility to apply for a VA mortgage.

• Piggy-back loans

  You can fund your down payment using a second mortgage that closes with the first. Generally the first mortgage is for 80% of the cost of the home and the "piggyback" is for 10%. In contrast to the traditional 20 percent down payment, the buyer just has to cover the remaining 10 percent.

• Carry-Back loans

  In a "carry back" mortgage, the seller commits to loan you some of his home equity to help you with your down payment money. In this scenario, you would finance the largest portion of the purchase price with a traditional lending institution and finance the remainder with the seller. Usually you'll pay a somewhat higher rate on the loan from the seller.

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