Your Down Payment

Lots of folks who are looking to purchase a new house can easily qualify for several different kinds of mortgages, but they don't have a large sum of cash to put up the standard down payment. Start here

Tighten your belt and save. Scrutinize your budget to uncover extra money to go toward your down payment. There are bank programs through which a specific portion of your paycheck is automatically transferred into savings every pay period. You might look into some big expenses in your spending history that you can do without, or trim, at least temporarily. For example, you might decide to move into less expensive housing, or skip a vacation.

Sell items you don't really need and get a part-time job. Perhaps you can find an additional job and save your earnings. Additionally, you can put together an exhaustive list of items you can sell. Unused gold jewelry can be sold at local jewelers. Maybe you own desirable items you can put up for sale on an auction website, or household items for a garage or tag sale. You might also look into what any investments you hold will bring if sold.

Borrow your down payment from a retirement plan. Research the details for your individual plan. Many people get down payment money by withdrawing what they need from their IRAs or pulling funds out of 401(k) programs. Make sure you understand about any penalties, the effect this will have on your taxes, and repayment terms.

Ask for a gift from your family. First-time buyers somtimes receive help with their down payment help from thoughtful parents and other family members who may be able to help them get into their own home. Your family members may be pleased to help you reach the milestone of buying your own home.

Learn about housing finance agencies. These types of agencies extend provisional mortgate loan programs to low and moderate-income borrowers, buyers with an interest in remodeling a house within a particular part of the city, and other specific types of buyers as defined by each finance agency. Working with a housing finance agency, you probably will be given an interest rate that is below market, down payment assistance and other benefits. Housing finance agencies may assist you with a reduced interest rate, get you your down payment, and provide other benefits. These non-profit agencies to promote home ownership in particular areas.

Explore no-down and low-down mortgage loans.

• Federal Housing Administration (FHA) mortgage loans

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a significant part in aiding low and moderate-income families qualify for mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers in getting mortgage loans. FHA helps first-time buyers and others who may not be able to qualify for a traditional mortgage loan by themselves, by offering mortgage insurance to the lenders. Down payment amounts for FHA loans are less than those for traditional mortgages, even though these mortgages hold current interest rates. Closing costs might be included in the mortgage, and the down payment could be as low as 3 percent of the total amount.

• VA mortgage loans

  VA loans are backed by the Department of Veterans Affairs. Service persons and veterans can benefit from a VA loan, which typically offers a reasonable fixed interest rate, no down payment, and limited closing costs. Even though the VA does not provide the mortgage loans, it does issue a certificate of eligibility to qualify for a VA mortgage.

• Piggy-back loans

  A piggy-back loan is a second mortgage that you close with the first. Generally the piggyback loan takes care of 10 percent of the home's price, while the first mortgage finances 80 percent. Rather than the traditional 20 percent down payment, the homebuyer just has to cover the remaining 10 percent.

• Carry-Back loans

  In a "carry back" situation, the seller commits to lend you part of his home equity to help you get your down payment funds. You would borrow the largest portion of the purchase price from a traditional lending institution and borrow the remaining amount from the seller. Typically you'll pay a slightly higher rate on the loan financed by the seller.

No matter how you gather your down payment money, the satisfaction of living in your own home will be just as great!

Need to talk about the best options for down payments? Give us a call at 5626935048.