Building Your Down Payment

Many borrowers can qualify for several different kinds of mortgages, but they don't have a lot of money to pay the standard down payment. Do you want to look into getting a new home, but don't know how you should get together a down payment?

Cut expenses and save. Look for ways to trim your monthly expenditures to put away money for a down payment. You might also try enrolling in an automatic savings plan at your bank to automatically have a predetermined portion of your take-home pay moved into a savings account. You would be wise to 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 stay close to home for your family vacation.

Work more and sell things you don't need. Look for an additional job. This can be exhausting, but the temporary trial can provide your down payment money. You can also seriously consider the possessions you actually need and the items you can sell. A closetful of small items may add up to a nice sum at a garage or tag sale. You can also research what any investments you hold will bring if sold.

Tap into your retirement funds. Check the parameters of your specific program. Some people get down payment money from withdrawing funds from Individual Retirement Accounts or getting money out of 401(k) plans. Be sure you know about any penalties, the effect this could have on taxes, and repayment obligation.

Request a gift from your family. First-time homebuyers somtimes get down payment assistance from gracious family members who are prepared to help them get into their own home. Your family members may be willing to help you reach the goal of having your own home.

Learn about housing finance agencies. Special mortgate loan programs are given to homebuyers in specific situations, like low income homebuyers or future homeowners planning to renovating houses in a particular part of town, among others. With the help of this kind of agency, you probably will be given an interest rate that is below market, down payment help and other incentives. Housing finance agencies may assist you with a reduced interest rate, get you your down payment, and offer other benefits. The main purpose of not-for-profit housing finance agencies is build up residence ownership in specific areas.

Explore no-down and low-down mortgage loans.

  • FHA mortgage loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a vital part in assisting low and moderate-income individuals qualify for mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA assists first-time buyers and others who might not be able to qualify for a conventional loan on their own, by offering mortgage insurance to the lenders. Interest rates for an FHA loan normally feature the market interest rate, but the down payment for an FHA mortgage will be lower than those of conventional loans. The down payment may be as low as three percent and the closing costs could be financed in the mortgage.

  • VA loans

    VA loans are guaranteed by the U.S. Department of Veterans Affairs. Service persons and veterans can benefit from a VA loan, which usually offers a low fixed rate of interest, no down payment, and limited closing costs. While it's true that the loans are not actually financed by the VA, the office certifies applicants by providing eligibility certificates.

  • Piggy-back loans

    You can finance a down payment with a second mortgage that closes at the same time as the first. Most of the time, the first mortgage is for 80% of the purchase amount and the "piggyback" is for 10%. In contrast to the usual 20 percent down payment, the buyer will just have to pull together the remaining 10 percent.

  • Carry-Back loans

    We a seller carries back a second mortgage, the seller loans you part of his or her home equity. You would borrow the largest portion of the purchase price from a traditional lending institution and borrow the remainder from the seller. Typically you'll pay a slightly higher rate with the loan from the seller.

The feeling of accomplishment will be the same, no matter how you manage to come up with the down payment. Your new home will be your reward!

Need to talk about your down payment? Call us at (407) 898-7559.

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