Your Down Payment

Lots of folks who would like to buy a new home can easily qualify for several different kinds of mortgages, but they don't have much to put up the standard down payment. Here's where to get started

Tighten your belt and save. Scrutinize the budget to find ways you can cut expenses to go toward your down payment. Also, you can look into bank programs through which some of your paycheck is automatically transferred into a savings account every pay period. Some effective approaches to build up funds include moving into a residence that is less expensive, and skipping your vacation for a year or two.

Work more and sell items you don't need. Try to get an additional job. This can be rough, but the temporary trial can help you get your down payment. You can also get creative about the things you could be able to sell. You might own collectibles you can sell on an online auction, or quality household items for a tag or garage sale. Also, you can consider selling any investments you own.

Tap into retirement funds. Explore the details for your particular plan. Many homebuyers get down payment money from withdrawing from their Individual Retirement Accounts or taking money out of their 401(k) programs. Make sure you understand the tax ramifications, repayment terms, and any penalties for withdrawing early.

Ask for a gift from family. Many homebuyers are sometimes lucky enough to receive help with their down payment assistance from giving family members who may be anxious to help get them in their own home. Your family members may be pleased to help you reach the goal of having your own home.

Research housing finance agencies. Special mortgate loan programs are provided to homebuyers in specific circumstances, such as low income homebuyers or buyers looking to remodel houses in a targeted area, among others. With the help of this type of agency, you probably will receive a below market interest rate, down payment help and other advantages. These kinds of agencies may assist eligible buyers with a reduced rate of interest, get you your down payment, and provide other assistance. These non-profit agencies exist to build up the value of homes in certain areas.

Learn about low-down and no-down mortgage loan programs.

  • FHA mortgages

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a vital role in aiding low and moderate-income families get mortgage loans. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA helps first-time homebuyers and others who would not be able to qualify for a traditional loan by themselves, by offering mortgage insurance to lenders. Down payment sums for FHA loans are below those for typical mortgages, even though these mortgages hold average rates of interest. Closing costs may be financed in the mortgage, and the down payment could be as low as 3 percent of the total amount.

  • VA mortgage loans

    Guaranteed by the Department of Veterans Affairs, a VA loan qualifies service people and veterans. This specialized loan does not require a down payment, has reduced closing costs, and provides a competitive interest rate. Although the VA doesn't actually finance the mortgage loans, it does certify eligibility to apply for a VA mortgage.

  • Piggy-back loans

    You may fund a down payment using a second mortgage that closes along with the first. Most of the time, the first mortgage is for 80% of the purchase price and the "piggyback" funds 10%. The homebuyer pays the remaining 10%, instead of come up with the usual 20% down payment.

  • Carry-Back loans

    In a "carry back" situation, the seller agrees to loan you part of his own equity to help you get your down payment money. The buyer finances most of the purchase price with a traditional mortgage program and finances the remaining funds with the seller. Typically you will pay a somewhat higher interest rate on the loan financed by the seller.

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

Want to discuss your down payment? Call us: (512) 291-6100.

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