Your Down Payment

Lots of borrowers can easily qualify for a loan, but they can't afford a large down payment. We have a few suggestions

Reduce expenses and save. Scrutinize the budget to find extra money to save for your down payment. There are bank programs through which a portion of your take-home pay is automatically deposited into a savings account each pay period. Some practical methods to build up funds include moving into housing that is less expensive, and skipping a year's vacation.

Work a second job and sell things you do not need. Maybe you can get a second job to get your down payment money. Additionally, you can put together an exhaustive inventory of items you can sell. Broken gold jewelry can bring a good amount from local jewelry stores. A closetful of small things may add up to a fair amount at a garage or tag sale. You could also research what any investments you own could sell for.

Borrow from your retirement funds. Investigate the parameters of your specific program. Some people get down payment money by withdrawing from Individual Retirement Accounts or taking money out of their 401(k) plans. You will need to ensure you know about any penalties, the way this could affect on taxes, and repayment terms.

Ask for a gift from your family. Many buyers are sometimes lucky enough to get down payment assistance from thoughtful parents and other family members who are able to help get them in their first home. Your family members may be eager to help you reach the milestone of having your own home.

Learn about housing finance agencies. Special loan programs are given to buyers in certain situations, such as low income buyers or future homeowners planning to improve homes in a particular area, among others. With the help of a housing finance agency, you probably will receive a below market interest rate, down payment help and other advantages. These kinds of agencies can help you with a reduced rate of interest, help with your down payment, and provide other assistance. These non-profit agencies exist to boost community in particular neighborhoods.

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

  • FHA mortgage loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a vital role in aiding low to moderate-income families qualify for mortgage loans. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA provides mortgage insurance to private lenders, making the buyers eligible for a home loan. Interest rates for an FHA mortgage normally feature the current interest rate, while the down payment for an FHA mortgage are below those of conventional loans. The down payment can go as low as three percent and the closing costs can be packaged in the mortgage loan.

  • VA mortgage loans

    Guaranteed by the Department of Veterans Affairs, a VA loan is offered to service people and veterans. This special loan does not require a down payment, has limited closing costs, and provides the benefit of a competitive rate of interest. Even though the VA doesn't actually finance the mortgage loans, it does certify eligibility to qualify for a VA loan.

  • Piggy-back loans

    You can fund a down payment through a second mortgage that closes at the same time as the first. Generally the first mortgage is for 80% of the purchase price and the "piggyback" funds 10%. In contrast to the traditional 20 percent down payment, the buyer just has to pull together the remaining 10 percent.

  • Carry-Back loans

    In a "carry back" situation, the seller agrees to lend you some of his home equity to help you with your down payment funds. In this scenario, you would borrow the majority of the purchase price from a traditional mortgage lending institution and finance the remainder with the seller. Typically, this type of second mortgage has higher interest.

No matter how you gather down payment funds, the satisfaction of reaching the goal of owning your own home will be just as great!

Want to discuss your down payment? Give us a call: (407) 898-7559.

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