Putting Together Your Down Payment

Lots of buyers qualify for several different kinds of mortgages, but they can't afford a large down payment. Here are a few straightforward methods that will help you put together a down payment

Tighten your belt and save. Be on the look-out for ways to reduce your monthly expenses to save toward a down payment. There are bank programs through which a portion of your take-home pay is automatically placed into a savings account each pay period. Some practical strategies to put together funds include moving into a residence that is less expensive, and skipping a year's vacation.

Sell items you do not need and get a part-time job. Try to get a second job. This can be rough, but the temporary difficulty can provide your down payment money. You can also get serious about the possessions you actually need and the items you can sell. Multiple small items may add up to a nice sum at a garage or tag sale. Also, you might want to think about selling any investments you hold.

Tap into retirement funds. Check the provisions of your specific program. Many homebuyers get down payment money from withdrawing what they need from IRAs or taking money out of their 401(k) programs. You will want to ensure you understand about any penalties, the effect this may have on your taxes, and repayment terms.

Request a gift from your family. Many homebuyers somtimes get down payment assistance from giving parents and other family members who are anxious to help get them in their first home. Your family members may be happy at the chance to help you reach the goal of buying your first home.

Contact housing finance agencies. These types of agencies offer special loan programs to moderate and low income borrowers, buyers interested in rehabilitating a house within a targeted area, and other particular types of buyers as specified by each agency. Financing with a housing finance agency, you may get a below market interest rate, down payment help and other incentives. Housing finance agencies may assist eligible buyers with a lower rate of interest, get you your down payment, and provide other advantages. The primary mission of non-profit housing finance agencies is to promote the purchase of homes in specific parts of the city.

Explore no-down and low-down mortgage loans.

• FHA loans

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a critical part in aiding low to moderate-income families qualify for mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA aids first-time homebuyers and others who might not be able to qualify for a conventional mortgage loan on their own, by providing mortgage insurance to private lenders. Interest rates with an FHA mortgage generally feature the market interest rate, while the down payment with an FHA loan will be lower than those of conventional loans. The required down payment can go as low as 3 percent while the closing costs might be financed in the mortgage loan.

• VA mortgages

  VA loans are backed by the Department of Veterans Affairs. Veterens and service people can receive a VA loan, which usually offers a competitive fixed rate of interest, no down payment, and minimal closing costs. Although the VA does not provide the mortgage loans, it does certify eligibility to qualify for a VA loan.

• Piggy-back loans

  A piggy-back loan is a second mortgage that you close with the first. Usually the first mortgage covers 80% of the cost of the home and the "piggyback" is for 10%. The borrower covers the remaining 10%, rather than come up with the typical 20% down payment.

• Carry-Back loans

  In a "carry back" mortgage, the seller commits to lend you a portion of his own equity to help you with your down payment funds. You would finance the largest portion of the purchase price with a traditional lending institution and borrow the remainder from the seller. Often, this kind of second mortgage has a higher rate of interest.

No matter your method of getting together your down payment, the thrill of owning your own home will be just as great!

Want to discuss the best options for down payments? Give us a call: 5122916100.