Your Down Payment

Lots of borrowers qualify for a mortgage loan, but they don't have a lot of cash to put up the standard down payment. Do you want to buy a new home, but don't know how to put together your down payment?

Reduce expenses and save. Scrutinize the budget to discover extra money to save for your down payment. Also, you can look into bank programs through which a specific portion of your paycheck is automatically deposited into a savings account each pay period. You would be wise to look into some big expenses in your spending history that you can live without, or trim, at least temporarily. For example, you might decide to move into less expensive housing, or stay local for your vacation.

Work a second job and sell things you don't need. Perhaps you can find an additional job and save your earnings. Additionally, you can put together a comprehensive inventory of items you may be able to sell. Unused gold jewelry can be sold at local jewelers. Maybe you have desirable items you can sell at an auction website, or household items for a garage or tag sale. You can also explore what any investments you own may bring if sold.

Borrow from your retirement plan. Research the details for your particular plan. Some people get down payment money from withdrawing from Individual Retirement Accounts or borrowing from 401(k) programs. Be sure to ask your plan representative about the tax ramifications, repayment terms, and any penalties for withdrawing early.

Ask for assistance from generous members of your family. First-time homebuyers somtimes receive help with their down payment assistance from gracious parents and other family members who may be able to help get them in their first home. Your family members may be willing to help you reach the milestone of buying your own home.

Learn about housing finance agencies. These agencies provide provisional loan programs for low and moderate-income homebuyers, buyers interested in sprucing up a home within a particular part of the city, and additional groups as defined by the finance agency. With the help of a housing finance agency, you probably will be given a below market interest rate, down payment help and other perks. These kinds of agencies may help eligible homebuyers with a lower interest rate, help with your down payment, and offer other advantages. The main goal of non-profit housing finance agencies is promoting home ownership in targeted areas.

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

• Federal Housing Administration (FHA) loans

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in aiding low and moderate-income buyers get mortgages. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA offers mortgage insurance to the private lenders, enabling new homebuyers who might not qualify for a typical loan, to get a mortgage. Down payment totals for FHA loans are below those for traditional mortgage loans, even though these mortgages come with current interest rates. Closing costs can be covered by the mortgage, while your down payment might be as low as 3 percent of the total amount.

• VA mortgages

  With a guarantee from the Department of Veterans Affairs, a VA loan is offered to veterens and service people. This specialized loan does not require a down payment, has reduced closing costs, and offers a competitive interest rate. Even though the VA doesn't issue the mortgage loans, it does certify eligibility to qualify for a VA loan.

• Piggy-back loans

  You can fund a down payment with a second mortgage that closes at the same time as the first. Most of the time, the first mortgage covers 80% of the cost of the home and the "piggyback" is for 10%. The homebuyer pays the remaining 10%, rather than putting the typical 20% down payment.

• Carry-Back loans

  In the option of the seller "carrying back a second mortgage," the you borrow a portion of the seller's home equity.. The buyer funds the majority of the purchase price with a traditional mortgage program and finances the remaining funds with the seller. Usually you'll pay a slightly higher rate on the loan from the seller.

No matter your method of getting together your down payment money, the satisfaction of reaching the goal of owning your own home will be just as sweet!

Want to discuss down payments? Call us: 4078987559.