Your Down Payment
Lots of folks who would like to buy a new home can qualify for several different kinds of mortgages, but they don't have much to pay a down payment. Want to buy a new home, but don't know how you should get together your down payment?
Slash the budget and build up savings. Be on the look-out for ways you can trim your monthly expenditures to put away money for a down payment. There are bank programs in which some of your paycheck is automatically transferred into a savings account every pay period. Some effective ways to put together funds include moving into a residence that is less expensive, and skipping your vacation for a year or two.
Sell things you do not really need and get a second job. Perhaps you can find an additional job to get your down payment money. You can also get serious about the possessions you actually need and the items you can put up for sale. You might have collectibles you can sell on an online auction, or household goods for a tag or garage sale. You can also explore what your investments could sell for.
Borrow from a retirement plan. Research the specifics of your individual plan. It is possible to pull out money from a 401(k) for a down payment or withdraw from an IRA. You will need to ensure you are clear about any penalties, the effect this may have on your taxes, and repayment terms.
Ask for assistance from members of your family. First-time homebuyers somtimes receive help with their down payment help from gracious parents and other family members who are willing to help them get into their own home. Your family members may be inclined to help you reach the milestone of having your own home.
Contact housing finance agencies. Special mortgate loan programs are extended to buyers in specific circumstances, such as low income homebuyers or buyers planning to remodel houses in a particular area, among others. With the help of this type of agency, you can receive an interest rate that is below market, down payment help and other incentives. These types of agencies may help eligible buyers with a lower rate of interest, get you your down payment, and provide other advantages. These non-profit programs exist to build up home ownership in specific areas.
Find out about low-down and no-down mortgages.
- Federal Housing Administration (FHA) loans
The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a significant role in assisting low to moderate-income Americans get mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get
FHA aids first-time homebuyers and others who may not be eligible for a conventional mortgage on their own, by providing mortgage insurance to lenders.
Down payment amounts for FHA mortgages are smaller than those with typical mortgages, even though these mortgages come with average rates of interest. The down payment may go as low as three percent while the closing costs can be financed in the mortgage.
- VA mortgages
Guaranteed by the Department of Veterans Affairs, a VA loan assists veterens and service people. This specialized loan does not require a down payment, has reduced closing costs, and offers a competitive interest rate. While the VA does not finance 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 you close with the first. In most cases the first mortgage is for 80% of the purchase amount and the "piggyback" is for 10%. Instead of the traditional 20 percent down payment, the homebuyer just has to cover the remaining 10 percent.
- Carry-Back loans
In a "carry back" situation, the seller commits to loan you part of his home equity to assist you with your down payment money. In this scenario, you would finance the majority of the purchase price with a traditional lender and finance the remainder with the seller. Typically you'll pay a slightly higher interest rate with the loan financed by the seller.
The satisfaction will be the same, no matter how you manage to get together the down payment. Your new home will be well worth it!
Need to talk about your down payment? Give us a call: 4078987559.