Your Down Payment

Lots of borrowers can easily qualify for various loan programs, but they can't afford a large down payment. Do you want to look into getting a new house, but don't know how you should put together a down payment?

Cut expenses and save. Be on the look-out for ways to trim your expenditures to set aside funds for a down payment. You also might enroll in an automatic savings plan at your bank to have a portion of your payroll automatically transferred into a savings account. Some practical approaches to save additional funds include moving into less expensive housing, and skipping a year's vacation.

Work a second job and sell things you don't need. Maybe you can get an additional job to get your down payment money. You can also get creative about the things you migh be able to put up for sale. Maybe you have collectibles you can sell at an auction website, or quality household items for a tag or garage sale. You can also explore what your investments may bring if sold.

Tap into your retirement funds. Investigate the parameters of your specific program. You can borrow funds from a 401(k) for you down payment or make a withdrawal from an IRA. You will want to ensure you know about any penalties, the way this may affect on income taxes, and repayment terms.

Ask for help from members of your family. First-time buyers are often lucky enough to receive down payment assistance from gracious parents and other family members who may be prepared to help get them in their own home. Your family members may be willing to help you reach the goal of buying your first home.

Research housing finance agencies. These agencies provide special mortgate loan programs to moderate and low income buyers, buyers with an interest in rehabilitating a residence within a particular area, and other groups as specified by the agency. Financing through this type of agency, you probably will receive an interest rate that is below market, down payment help and other advantages. Housing finance agencies may assist eligible homebuyers with a reduced rate of interest, get you your down payment, and provide other advantages. These non-profit agencies to promote home ownership in certain areas.

Find out about low-down and no-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 an important part in assisting low to moderate-income families qualify for mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA aids first-time homebuyers and others who might not be able to qualify for a typical mortgage by themselves, by offering mortgage insurance to the private lenders. Down payment totals for FHA loans are smaller than those with conventional mortgage loans, although these loans come with average interest rates. Closing costs can be covered by the mortgage, and the down payment may be as low as 3 percent of the total.

• VA loans

  Guaranteed by the Department of Veterans Affairs, a VA loan assists veterens and service people. This special loan requires no down payment, has reduced closing costs, and offers a competitive rate of interest. Although the loans are not actually provided by the VA, the department certifies applicants by providing eligibility certificates.

• Piggy-back loans

  A piggy-back loan is a second mortgage that you close at the same time as the first. Usually the piggyback loan takes care of 10 percent of the purchase price, while the first mortgage covers 80 percent. The borrower pays the remaining 10%, instead of having to put together 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 assist you with your down payment funds. The buyer funds the majority of the purchase price with a traditional mortgage program and finances the remaining funds with the seller. Typically you will pay a somewhat higher interest rate with the loan financed by the seller.

The feeling of accomplishment will be the same, no matter which method you use to pull together the down payment. Your brand new home will be well worth it!

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