Putting Together Your Down Payment

Many buyers qualify for a mortgage loan, but they can't afford a large down payment. Below are a few methods that will help you put together a down payment

Tighten your belt and save. Turn your budget inside out to uncover ways you can cut expenses to go toward your down payment. You might also try enrolling in an automatic savings plan to have a percentage of your pay automatically transferred into savings. You might look into some big expenses in your spending history that you can give up, or reduce, at least temporarily. Here are a couple of examples: you might decide to move into less expensive housing, or stay local for your family vacation.

Work more and sell items you do not need. Try to get an additional job. This can be exhausting, but the temporary difficulty can provide your down payment money. Additionally, you can make an exhaustive inventory of items you may be able to sell. Unused gold jewelry can be sold at local jewelers. A closetful of small things can add up to a nice sum at a garage or tag sale. Also, you might want to look into selling any investments you own.

Borrow from your retirement funds. Check the parameters of your specific program. Many people get down payment money by withdrawing funds from IRAs or taking money out of 401(k) programs. Be sure you are clear about any penalties, the way this could affect on your income taxes, and repayment obligation.

Ask for a gift from your family. Many buyers are often fortunate enough to receive down payment assistance from giving parents and other family members who may be willing to help get them in their own home. Your family members may be pleased to help you reach the goal of having your first home.

Contact housing finance agencies. Special mortgage loans are extended to homebuyers in specific situations, such as low income buyers or future homeowners looking to remodel houses in a specific place, among others. Working with a housing finance agency, you probably will receive an interest rate that is below market, down payment help and other advantages. Housing finance agencies may help you with a reduced rate of interest, help with your down payment, and offer other assistance. The central purpose of non-profit housing finance agencies is boosting home ownership in specific places.

Research no-down and low-down mortgage loans.

• 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 role in assisting low to moderate-income Americans get mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA provides mortgage insurance to private lenders, enabling homebuyers who may not be eligible for a typical loan, to receive financing. Down payment amounts for FHA loans are smaller than those of traditional mortgage loans, although these mortgages come with average interest rates. Closing costs can be included in the mortgage, while your down payment may be as low as 3 percent of the total.

• VA mortgages

  VA loans are guaranteed by the Department of Veterans Affairs. Veterens and service people can get a VA loan, which generally offers a low fixed interest rate, no down payment, and limited closing costs. While it's true that the loans aren't actually issued by the VA, the office verfifies borrowers by issuing eligibility certificates.

• Piggy-back loans

  A piggy-back loan is a second mortgage that you close along with the first. Often the first mortgage covers 80% of the purchase amount and the "piggyback" funds 10%. The borrower pays the remaining 10%, instead of having to put together the typical 20% down payment.

• Carry-Back loans

  In a "carry back" agreement, the seller agrees to lend you a portion of his home equity to help you with your down payment money. The buyer finances most of the purchase price through a traditional mortgage program and borrows the remaining funds from the seller. Often, this type of second mortgage will have a higher rate of interest.

No matter your method of pulling together your down payment, the satisfaction of living in your own home will be just as great!

Want to discuss down payment options? Call us at 4078987559.