Your Down Payment

Many borrowers can easily qualify for various loan programs, but they don't have a lot of money to pay a down payment. Here are a few ideas:

Slash your budget and build up savings. Be on the look-out for ways you can reduce your monthly expenditures to set aside money for a down payment. You might also try enrolling in an automatic savings plan at your bank to have a portion of your payroll automatically moved into savings. Some practical ways to save additional funds include moving into less expensive housing, and staying local for your vacation for a year or two.

Work more and sell items you don't need. Perhaps you can get an additional job and save your earnings. You can also get creative about the items you could be able to sell. Multiple small items could add up to a nice sum at a garage or tag sale. Also, you might want to think about selling any investments you own.

Borrow money from your retirement plan. Investigate the provisions of your particular plan. It is possible to take out money from a 401(k) plan for a down payment or perform a withdrawal from an Individual Retirement Account. You will need to ensure you are clear about any penalties, the effect this could have on taxes, and repayment terms.

Ask for assistance from family members. First-time buyers are often fortunate enough to receive help with their down payment assistance from giving family members who may be willing to help them get into their first home. Your family members may be happy at the chance to help you reach the goal of buying your own home.

Contact housing finance agencies. These agencies extend special mortgate loan programs to moderate and low income homebuyers, buyers with an interest in remodeling a home in a targeted area, and additional groups as defined by the finance agency. Financing with this type of agency, you may get an interest rate that is below market, down payment assistance and other incentives. These kinds of agencies may assist you with a lower rate of interest, help with your down payment, and offer other advantages. The central mission of non-profit housing finance agencies is build up home ownership in specific parts of the city.

Find out about low-down and no-down mortgage loans.

• Federal Housing Administration (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 helping low to moderate-income Americans 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 assists first-time homebuyers and others who may not be able to qualify for a conventional mortgage loan by themselves, by offering mortgage insurance to private lenders. Interest rates with an FHA loan typically feature the going interest rate, while the down payment for an FHA mortgage will be below those of conventional loans. The down payment can be as low as three percent while the closing costs may be financed in the mortgage.

• VA mortgage loans

  VA loans are guaranteed by the U.S. Department of Veterans Affairs. Service persons and veterans qualify for a VA loan, which usually offers a reasonable fixed rate of interest, no down payment, and limited closing costs. Even though the VA does not provide the mortgage loans, it does issue a certificate of eligibility to apply for a VA mortgage.

• Piggy-back loans

  A piggy-back loan is a second mortgage that you close with the first. Generally the piggyback loan takes care of 10 percent of the purchase price, while the first mortgage finances 80 percent. Instead of the usual 20 percent down payment, the buyer will just have to pull together the remaining 10 percent.

• Carry-Back loans

  In a "carry back" situation, the seller agrees to loan you a portion of his own equity to help you get 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. Typically, this type of second mortgage will have a higher rate of interest.

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

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