Your Down Payment

Many borrowers can easily qualify for several different kinds of mortgages, but they don't have a lot of money to pay the standard down payment. Want to buy a new home, but aren't sure how to put together your down payment?

Reduce expenses and save. Be on the look-out for ways you can reduce your monthly expenditures to save toward a down payment. You might also try enrolling in an automatic savings plan to have a percentage of your payroll automatically deposited into savings. You might look into some big expenses in your budget that you can live without, or trim, at least temporarily. For example, you might move into less expensive housing, or stay local for your annual vacation.

Work more and sell things you do not need. Maybe you can get an additional job and build up your earnings. In addition, you can put together a comprehensive inventory of things you may be able to sell. Unused gold jewelry can bring a good amount from local jewelry stores. A closetful of small things may add up to a nice sum at a garage or tag sale. You can also look into what any investments you hold will bring if sold.

Borrow from a retirement plan. Explore the specifics of your particular plan. You may take out funds from a 401(k) for you down payment or withdraw from an IRA. Be sure you know about any penalties, the way this could affect on income taxes, and repayment obligation.

Ask for help from generous members of your family. First-time buyers somtimes receive down payment assistance from gracious family members who are able to help get them in their own home. Your family members may be pleased at the chance to help you reach the goal of buying your first home.

Contact housing finance agencies. Special mortgage loans are offered to buyers in specific circumstances, like low income buyers or future homeowners looking to remodel homes in a certain part of town, among others. Financing through a housing finance agency, you may receive an interest rate that is below market, down payment help and other advantages. Housing finance agencies may assist you with a reduced rate of interest, help with your down payment, and provide other assistance. These non-profit programs exist to promote home ownership in specific areas.

Find out about low-down and no-down mortgage loan programs.

• Federal Housing Administration (FHA) mortgage loans

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in assisting low to moderate-income individuals get mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals in getting mortgage loans. FHA offers mortgage insurance to private lenders, enabling new homebuyers who will not qualify for a traditional mortgage loan, to obtain home financing. Down payment requirements for FHA mortgages are lower than those of typical mortgage loans, although these loans hold average rates of interest. Closing costs may be included in the mortgage, and your down payment can be as low as 3 percent of the total.

• VA mortgage loans

  Guaranteed by the Department of Veterans Affairs, a VA loan assists service people and veterans. This special loan does not require a down payment, has reduced closing costs, and provides the advantage of a competitive rate of interest. While the mortgage loans are not actually issued by the VA, the department certifies borrowers by providing eligibility certificates.

• Piggy-back loans

  You may finance your down payment through a second mortgage that closes at the same time as the first. Most of the time, the piggyback loan takes care of 10 percent of the home's price, and the first mortgage finances 80 percent. The homebuyer covers the remaining 10%, instead of having to put together the typical 20% down payment.

• Carry-Back loans

  In a "carry back" agreement, the seller commits to loan you a portion of his own equity to help you get your down payment money. In this scenario, you would borrow the largest portion of the purchase price from a traditional mortgage lender and borrow the remaining amount from the seller. Often, this kind of second mortgage has a higher rate of interest.

The satisfaction will be the same, no matter which approach you use to put together your down payment. Your new home will be your reward!

Need to talk about the best options for down payments? Call us at 4357556622.