Building Your Down Payment

Lots of borrowers qualify for a mortgage loan, but they don't have a large sum of cash to pay a down payment. Here are a few methods that will help you get together your down payment

Slash the budget and build up savings. Be on the look-out for ways you can trim your expenses to save toward a down payment. You might also try enrolling in an automatic savings plan to automatically have a predetermined amount from your paycheck transferred into your savings account. Some practical ways to put together funds include moving into less expensive housing, and skipping your vacation for a year or two.

Sell items you don't need and get a part-time job. Try to find an additional job. This can be rough, but the temporary difficulty can help you get your down payment. Additionally, you can make an exhaustive list of things you may be able to sell. Unused gold jewelry can be sold at local jewelers. You might own collectibles you can put up for sale on an online auction, or household goods for a tag or garage sale. You can also look into what any investments you hold could sell for.

Borrow from a retirement plan. Check the parameters of your specific plan. It is possible to borrow money from a 401(k) for you down payment or make a withdrawal from an Individual Retirement Account. Make sure you understand the tax consequences, your obligation for repaying funds, and possible penalties for withdrawing early.

Ask for a gift from family. Many buyers somtimes get help with their down payment assistance from gracious parents and other family members who may be anxious to help get them in their first home. Your family members may be pleased to help you reach the milestone of buying your own home.

Contact housing finance agencies. Provisional loan programs are provided to homebuyers in certain situations, such as low income homebuyers or people looking to remodel homes in a specific area, among others. Working with a housing finance agency, you probably will get an interest rate that is below market, down payment help and other perks. These types of agencies can help eligible homebuyers with a reduced rate of interest, get you your down payment, and offer other benefits. These non-profit agencies to boost community in certain neighborhoods.

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

• FHA mortgages

  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 to moderate-income buyers get mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA offers mortgage insurance to private lenders, ensuring the buyers are eligible for a loan. Down payment totals for FHA loans are below those with conventional mortgage loans, although these mortgages hold current rates of interest. Closing costs can be included in the mortgage, while the down payment might be as low as 3% of the purchase price.

• VA mortgage loans

  With a guarantee from the Department of Veterans Affairs, a VA loan is offered to service people and veterans. This specialized loan does not require a down payment, has limited closing costs, and offers a competitive rate of interest. Even though the VA does not actually finance the mortgages, it does certify eligibility to apply for a VA mortgage.

• Piggy-back loans

  You may fund a down payment with a second mortgage that closes along with the first. Usually the first mortgage covers 80% of the purchase price and the "piggyback" funds 10%. Rather than the traditional 20 percent down payment, the homebuyer just has to pull together the remaining 10 percent.

• Carry-Back loans

  In a "carry back" situation, the seller commits to loan you a piece of his own equity to assist you with your down payment money. The buyer finances most of the purchase price with a traditional mortgage program and borrows the remaining funds from the seller. Usually you will pay a somewhat higher interest rate on the loan from the seller.

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

Want to discuss your down payment? Give us a call: 4078987559.