Your Down Payment

Many buyers can qualify for a mortgage loan, but they can't afford a large down payment. We have a few suggestions

Cut expenses and save. Be on the look-out for ways to reduce your expenses to save toward a down payment. There are bank programs in which some of your paycheck is automatically transferred into savings every pay period. You could look into some big expenses in your spending history that you can give up, or reduce, at least temporarily. For example, you may move into less expensive housing, or skip a family vacation.

Sell things you do not need and find a second job. Maybe you can get an additional job and build up your earnings. In addition, you can put together a comprehensive inventory of items you can sell. Broken gold jewelry can bring a good price from local jewelers. Multiple small things may add up to a fair amount at a garage or tag sale. Also, you can think about selling any investments you own.

Borrow money from your retirement plan. Check the parameters of your particular plan. Many people get down payment money by withdrawing funds from Individual Retirement Accounts or getting funds out of their 401(k) programs. Make sure you know about any penalties, the effect this could have on your taxes, and repayment terms.

Ask for help from members of your family. First-time homebuyers are often fortunate enough to receive down payment assistance from caring parents and other family members who are willing to help get them in their first home. Your family members may be happy at the chance to help you reach the milestone of owning your own home.

Contact housing finance agencies. Provisional loan programs are provided to homebuyers in specific circumstances, like low income purchasers or future homeowners looking to improve houses in a certain area, among others. Working with a housing finance agency, you may get an interest rate that is below market, down payment assistance and other perks. Housing finance agencies may help eligible buyers with a lower interest rate, help with your down payment, and offer other advantages. These non-profit programs exist to boost the value of homes in particular neighborhoods.

Research no-down and low-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 an important role in assisting low to moderate-income buyers qualify for mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals who wish to get home financing. FHA provides mortgage insurance to private lenders, ensuring the buyers are eligible for financing. Interest rates for an FHA mortgage are usually the market interest rate, while the down payment amounts with an FHA mortgage will be below those of conventional loans. Closing costs can be covered by the mortgage, while your down payment might be as low as 3 percent of the total amount.

• VA mortgages

  VA loans are backed by the U.S. Department of Veterans Affairs. Veterens and service people can qualify for a VA loan, which usually offers a competitive interest rate, no down payment, and limited closing costs. Even though the VA does not actually finance the mortgages, it does issue a certificate of eligibility to apply for a VA loan.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes along with the first. Most of the time, the piggyback loan takes care of 10 percent of the home's price, and the first mortgage finances 80 percent. The borrower covers the remaining 10%, rather than come up with the typical 20% down payment.

• Carry-Back loans

  With a carry-back mortgage, the seller loans you part of his or her equity. You would finance the largest portion of the purchase price with a traditional lending institution and finance the remaining amount with the seller. Typically you'll pay a slightly higher rate on the loan from the seller.

Need to talk about the best options for down payments? Call us: 5626935048.