Putting Together Your Down Payment

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

Reduce expenses and save. Be on the look-out for ways you can trim your expenses to put away money for a down payment. You could also try enrolling in an automatic savings plan to have a portion of your payroll automatically transferred into your savings account. Some effective approaches to put together funds include moving into a residence that is less expensive, and staying home for your family vacation this year.

Work a second job and sell things you do not need. Look for a second job. This can be exhausting, but the temporary difficulty can provide your down payment money. Additionally, you can put together a comprehensive inventory of items you can sell. Unused gold jewelry can bring a good amount from local jewelers. A closetful of small items could add up to a nice sum at a garage or tag sale. Also, you can look into selling any investments you own.

Borrow funds from a retirement plan. Check the parameters of your retirement program. Many people get down payment money from withdrawing from Individual Retirement Accounts or borrowing from their 401(k) programs. Make sure you understand the tax ramifications, your obligation for repaying funds, and possible penalties for withdrawing early.

Ask for help from family members. First-time homebuyers somtimes get help with their down payment help from giving family members who may be eager to help them get into their first 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. These agencies provide provisional loan programs for low and moderate-income borrowers, buyers with an interest in rehabilitating a house in a specific part of the city, and other certain kinds of buyers as defined by the agency. Working with a housing finance agency, you probably will get an interest rate that is below market, down payment help and other advantages. These kinds of agencies can assist eligible homebuyers with a reduced rate of interest, get you your down payment, and provide other benefits. The main goal of non-profit housing finance agencies is to boost the purchase of homes in targeted places.

Explore no-down and low-down mortgages.

• FHA mortgages

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a vital part in assisting low to moderate-income individuals get mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA assists first-time homebuyers and others who may not be able to qualify for a traditional mortgage loan by themselves, by offering mortgage insurance to lenders. Interest rates for an FHA loan generally feature the going interest rate, but the down payment with an FHA mortgage are below those of conventional loans. Closing costs may be included in the mortgage, while the down payment could be as low as 3 percent of the total.

• VA mortgages

  VA loans are guaranteed by the U.S. Department of Veterans Affairs. Service persons and veterans can receive a VA loan, which generally offers a reasonable rate of interest, no down payment, and reduced closing costs. While the VA doesn't actually finance the mortgages, it does certify eligibility to apply for a VA mortgage.

• Piggy-back loans

  A piggy-back loan is a second mortgage that you close at the same time as the first. Often the first mortgage is for 80% of the purchase price and the "piggyback" is for 10%. The borrower pays the remaining 10%, instead of having to pull together the typical 20% down payment.

• Carry-Back loans

  In the option of the seller "carrying back a second mortgage," the seller loans you part of his or her home equity. In this scenario, you would borrow the largest portion of the purchase price from a traditional mortgage lender and finance the remainder with the seller. Usually this kind of second mortgage has a higher rate of interest.

Need to talk about the best options for down payments? Give us a call at 5122916100.