Building Your Down Payment

Lots of borrowers can qualify for several different kinds of mortgages, but they don't have a lot of money to put up a down payment. Get started here

Slash your budget and build up savings. Turn your budget upside-down to discover ways you can cut expenses to go toward your down payment. You could also try enrolling in an automatic savings plan at your bank to automatically have a predetermined amount from your take-home pay moved into your savings account. Some practical approaches to save additional funds include moving into a residence that is less expensive, and staying home for your vacation this year.

Sell things you don't need and find a second job. Look for a second job. This can be exhausting, but the temporary difficulty can provide your down payment money. You can also seriously consider the possessions you really need and the things you could be able to put up for sale. Maybe you have collectibles you can put up for sale on an auction website, or household items for a garage or tag sale. Also, you can look into selling any investments you own.

Borrow your down payment from a retirement plan. Investigate the provisions of your specific plan. You can pull out money from a 401(k) for you down payment or get a withdrawal from an Individual Retirement Account. Be sure you are clear about any penalties, the way this will affect on your taxes, and repayment terms.

Ask for help from generous family members. First-time buyers somtimes receive down payment assistance from gracious parents and other family members who may be eager to help get them in their own home. Your family members may be willing to help you reach the milestone of owning your own home.

Research housing finance agencies. These agencies extend provisional loan programs to moderate and low income borrowers, buyers interested in rehabilitating a residence within a specific part of the city, and other groups as specified by each finance agency. Working through this kind of agency, you may be given an interest rate that is below market, down payment help and other perks. These types of agencies may assist you with a reduced interest rate, get you your down payment, and offer other assistance. The central mission of not-for-profit housing finance agencies is build up home ownership in targeted parts of the city.

Research no-down and low-down mortgage loan programs.

• Federal Housing Administration (FHA) loans

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in aiding low to moderate-income buyers qualify for mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA aids first-time buyers and others who may not be eligible for a conventional mortgage by themselves, by offering mortgage insurance to private lenders. Interest rates with an FHA loan usually feature the current interest rate, but the down payment for an FHA mortgage will be lower than those of conventional loans. The down payment may go as low as three percent while the closing costs can be financed in the mortgage loan.

• VA mortgages

  VA loans are guaranteed by the Department of Veterans Affairs. Service persons and veterans can benefit from a VA loan, which generally offers a competitive fixed rate of interest, no down payment, and limited closing costs. Even though the VA doesn't provide the loans, it does certify eligibility to apply for a VA mortgage.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes with the first. Usually the piggyback loan takes care of 10 percent of the purchase amount, while the first mortgage finances 80 percent. Instead of the traditional 20 percent down payment, the homebuyer just has to pull together the remaining 10 percent.

• Carry-Back loans

  We a seller carries back a second mortgage, the you borrow part of the seller's home equity.. In this scenario, you would finance the largest portion of the purchase price with a traditional lender and borrow the remainder from the seller. Usually you will pay a slightly higher rate with the loan from the seller.

No matter your method of putting together your down payment, the satisfaction of reaching the goal of living in your own home will be just as great!

Need to talk about your down payment? Call us at 5626935048.