Your Down Payment

Many borrowers can easily qualify for several different kinds of mortgages, but they don't have a lot of money to put up a down payment. We have a few suggestions

Tighten your belt and save. Look for ways to trim your expenses to put away money for a down payment. There are bank programs through which some of your paycheck is automatically placed into a savings account every pay period. You could look into some big expenses in your budget that you can do without, or reduce, at least temporarily. For example, you may decide to move into less expensive housing, or stay close to home for your vacation.

Sell things you do not really need and find a part-time job. Try to get a second job. This can be exhausting, but the temporary difficulty can help you get your down payment. You can also seriously consider the possessions you really need and the things you migh be able to sell. Maybe you have desirable items you can put up for sale at an online auction, or household goods for a tag or garage sale. Also, you can consider selling any investments you hold.

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

Ask for a generous gift from family. Many buyers somtimes get down payment assistance from caring family members who are willing to help get them in their first home. Your family members may be pleased at the chance to help you reach the goal of owning your first home.

Contact housing finance agencies. Provisional mortgage loans are given to buyers in specific situations, like low income purchasers or future homeowners planning to remodel homes in a certain place, among others. With the help of a housing finance agency, you may receive an interest rate that is below market, down payment assistance and other incentives. These kinds of agencies may assist eligible homebuyers with a reduced interest rate, help with your down payment, and provide other assistance. The principal mission of not-for-profit housing finance agencies is boosting the purchase of homes in specific parts of the city.

Learn about low-down and no-down mortgages.

• Federal Housing Administration (FHA) mortgage loans

  The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in assisting low and moderate-income families 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 homebuyers and others who may not be able to qualify for a traditional mortgage by themselves, by providing mortgage insurance to the lenders. Down payment amounts for FHA mortgages are lower than those with typical mortgages, although these mortgages have average interest rates. Closing costs can be financed in the mortgage, and your down payment could be as low as 3 percent of the purchase price.

• VA mortgage loans

  VA loans are backed by the Department of Veterans Affairs. Service persons and veterans can get a VA loan, which typically offers a competitive fixed interest rate, no down payment, and minimal closing costs. Although the mortgage loans don't originate from the VA, the department verfifies borrowers by issuing eligibility certificates.

• Piggy-back loans

  A piggy-back loan is a second mortgage that you close at the same time as the first. Generally the piggyback loan is for 10 percent of the home's amount, and the first mortgage covers 80 percent. The homebuyer pays the remaining 10%, instead of putting the usual 20% down payment.

• Carry-Back loans

  In a "carry back" situation, the seller commits to lend you a portion of his home equity to help you get your down payment money. In this scenario, you would finance the majority of the purchase price with a traditional mortgage lending institution and finance the remainder with the seller. Generally, this form of second mortgage has higher interest.

The feeling of accomplishment will be the same, no matter which strategy you use to pull together the down payment. Your new home will be your reward!

Want to discuss the best options for down payments? Call us at 4078987559.