Putting Together Your Down Payment

Lots of borrowers qualify for several different kinds of mortgages, but they can't afford a large down payment. Here are a few straightforward methods that will help you put together a down payment

Tighten your belt and save. Be on the look-out for ways to trim your expenditures to save toward a down payment. There are bank programs through which some of your paycheck is automatically placed into savings every pay period. You could look into some big expenses in your budget that you can live without, or reduce, at least temporarily. For example, you may decide to move into less expensive housing, or skip a family vacation.

Sell things you do not need and find a part-time job. Maybe you can get a second job and build up your earnings. You can also get creative about the items you may be able to sell. You might have collectibles you can sell on an online auction, or quality household goods for a tag or garage sale. Also, you can consider selling any investments you hold.

Borrow from your retirement funds. Check the parameters of your particular plan. You can borrow funds from a 401(k) for a down payment or withdraw from an Individual Retirement Account. Make sure you comprehend the tax ramifications, your obligation for repaying funds, and early withdrawal penalties.

Ask for help from generous family members. Many homebuyers somtimes receive down payment assistance from caring family members who are anxious to help them get into their own home. Your family members may be inclined to help you reach the goal of having your own home.

Learn about housing finance agencies. These types of agencies offer provisional loan programs for low and moderate-income buyers, buyers interested in remodeling a house in a particular area, and additional groups as specified by each finance agency. With the help of this kind of agency, you can receive an interest rate that is below market, down payment assistance and other perks. Housing finance agencies can help you with a lower interest rate, help with your down payment, and offer other advantages. These non-profit programs to promote the value of homes in particular areas.

Research no-down and low-down mortgages.

• Federal Housing Administration (FHA) mortgages

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a critical part in helping low to moderate-income individuals qualify for mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA helps first-time buyers and others who might not be eligible for a traditional mortgage loan on their own, by offering mortgage insurance to lenders. Down payment totals for FHA mortgages are lower than those of traditional mortgages, even though these mortgages hold average rates of interest. The required down payment may go as low as 3 percent while the closing costs can be packaged in the mortgage.

• VA mortgages

  VA loans are backed by the Department of Veterans Affairs. Veterens and service people are eligible for a VA loan, which typically offers a reasonable fixed interest rate, no down payment, and limited closing costs. Even though the VA doesn't issue the loans, it does issue a certificate of eligibility to qualify for a VA loan.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes at the same time as the first. Usually the piggyback loan takes care of 10 percent of the home's price, while the first mortgage covers 80 percent. In contrast to the traditional 20 percent down payment, the buyer will just have to cover the remaining 10 percent.

• Carry-Back loans

  In a "carry back" agreement, the seller commits to loan you part of his home equity to help you get your down payment money. The buyer finances most of the purchase price through a traditional mortgage program and borrows the remainder from the seller. Generally, this kind of second mortgage will have a higher rate of interest.

The feeling of accomplishment will be the same, no matter which approach you use to come up with your down payment. Your brand new home will be worth it!

Need to talk about down payments? Call us: 4078987559.