Your Down Payment

Many buyers can qualify for various loan programs, but they don't have a large sum of cash to put up a down payment. Here are a few straightforward ways to put together a down payment

Cut expenses and save. Look for ways you can reduce your expenses to set aside money for a down payment. There are bank programs in which a specific portion of your paycheck is automatically transferred into savings every pay period. You could look into some big expenses in your budget that you can give up, or trim, at least temporarily. For example, you might decide to move into less expensive housing, or stay local for your vacation.

Work more and sell things you don't need. Maybe you can get an additional job and save your earnings. You can also get serious about the possessions you actually need and the items you can put up for sale. Multiple small things can add up to a nice sum at a garage or tag sale. You can also explore what any investments you hold could bring if sold.

Borrow from retirement funds. Research the specifics for your individual plan. It is possible to take out money from a 401(k) for a down payment or withdraw from an IRA. Make sure you are clear about any penalties, the way this could affect on your taxes, and repayment obligation.

Request a generous gift from your family. First-time homebuyers somtimes get down payment help from giving family members who may be prepared to help them get into their own home. Your family members may be willing to help you reach the milestone of owning your first home.

Contact housing finance agencies. Provisional loan programs are given to buyers in certain situations, like low income purchasers or future homeowners planning to remodel houses in a particular place, among others. Working through this type of agency, you can be given an interest rate that is below market, down payment assistance and other benefits. These kinds of agencies may assist you with a lower interest rate, get you your down payment, and offer other benefits. These non-profit agencies exist to boost community in specific neighborhoods.

Explore no-down and low-down mortgage loan programs.

• Federal Housing Administration (FHA) loans

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a significant role in helping low and moderate-income individuals get mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids homebuyers in qualifying for home financing. FHA provides mortgage insurance to the private lenders, ensuring the buyers are eligible for a loan. Down payment requirements for FHA mortgages are less than those with typical mortgages, even though these mortgages hold average rates of interest. Closing costs may be covered by the mortgage, and the down payment can be as low as 3 percent of the total amount.

• VA mortgages

  Guaranteed by the Department of Veterans Affairs, a VA loan is offered to service people and veterans. This specialized loan does not require a down payment, has reduced closing costs, and provides a competitive interest rate. Even though the VA does not actually issue the mortgage loans, it does certify eligibility to qualify for a VA mortgage.

• Piggy-back loans

  You can fund a down payment using a second mortgage that closes with the first. Most of the time, the piggyback loan takes care of 10 percent of the home's price, and the first mortgage covers 80 percent. The borrower covers the remaining 10%, instead of come up with the usual 20% down payment.

• Carry-Back loans

  In a "carry back" agreement, the seller agrees to loan you a portion of his own equity to help you get your down payment money. The buyer funds the majority of the purchase price with a traditional mortgage program and borrows the remaining funds from the seller. Typically, this type of second mortgage has a higher rate of interest.

No matter your strategy of pulling together down payment money, the thrill of living in your own home will be just as sweet!

Want to discuss down payment options? Call us at 5122916100.