Your Down Payment

Lots of borrowers can qualify for various loan programs, but they can't afford a large down payment. Do you want to buy a new home, but aren't sure how to get together a down payment?

Slash your budget and build up savings. Turn your budget inside out to discover ways you can cut expenses to save for your down payment. Also, you can look into bank programs through which a portion of your paycheck is automatically transferred 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 may move into less expensive housing, or stay close to home for your family vacation.

Sell items you do not need and find a part-time job. Maybe you can get an additional job and build up your earnings. Additionally, you can put together a comprehensive inventory of items you can sell. Unworn gold jewelry can be sold at local jewelry stores. Maybe you own desirable items you can put up for sale at an auction website, or household items for a garage or tag sale. You might also look into what any investments you hold may bring if sold.

Tap into retirement funds. Check the provisions of your particular plan. Many people get down payment money from withdrawing what they need from Individual Retirement Accounts or taking money out of their 401(k) plans. You will want to ensure you are knowledgable about any penalties, the effect this could have on your income taxes, and repayment terms.

Ask for a generous gift from your family. Many buyers somtimes get help with their down payment assistance from caring family members who are anxious to help get them in their own home. Your family members may be pleased to help you reach the goal of owning your own home.

Contact housing finance agencies. Provisional loan programs are extended to homebuyers in specific situations, like low income purchasers or buyers looking to improve homes in a targeted part of town, among others. With the help of a housing finance agency, you may be given a below market interest rate, down payment assistance and other benefits. These kinds of agencies may help you with a reduced interest rate, help with your down payment, and provide other benefits. These non-profit agencies to promote the value of homes in certain places.

Learn about low-down and no-down mortgages.

• Federal Housing Administration (FHA) loans

  The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in assisting low to moderate-income individuals qualify for mortgages. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA provides mortgage insurance to private lenders, enabling new homebuyers who may not be eligible for a traditional loan, to get home financing. Down payment requirements for FHA loans are lower than those for typical mortgage loans, even though these loans have average interest rates. The down payment may be as low as three percent while the closing costs might be financed in the mortgage loan.

• VA mortgage loans

  VA loans are backed by the Department of Veterans Affairs. Veterens and service people can get a VA loan, which typically offers a low fixed rate of interest, no down payment, and limited closing costs. While the VA doesn't finance the mortgages, it does issue a certificate of eligibility to qualify for a VA mortgage.

• Piggy-back loans

  You can fund a down payment with a second mortgage that closes at the same time as the first. Usually the first mortgage covers 80% of the cost of the home and the "piggyback" funds 10%. In contrast to 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" agreement, the seller commits to lend you some of his home equity to help you get your down payment money. You would borrow the largest portion of the purchase price from a traditional lender and finance the remaining amount with the seller. Typically you'll pay a somewhat higher rate with the loan from the seller.

No matter how you gather down payment funds, the satisfaction of reaching the goal of owning your own home will be just as great!

Want to discuss your down payment? Give us a call: 4357556622.