Your Down Payment

Lots of borrowers qualify for a loan, but they can't afford a large down payment. Want to buy a new home, but aren't sure how you should get together your down payment?

Slash your budget and build up savings. Be on the look-out for ways you can trim your expenditures to save toward a down payment. There are bank programs through which some of your paycheck is automatically placed into savings every pay period. Some practical ways to build up funds include moving into less expensive housing, and skipping a year's vacation.

Work a second job and sell items you don't need. Look for an additional job. This can be exhausting, but the temporary trial can help you get your down payment. You can also get creative about the things you migh be able to put up for sale. A closetful of small things may add up to a fair amount at a garage or tag sale. You can also research what any investments you hold will sell for.

Borrow from your retirement plan. Research the details for your individual plan. Some people get down payment money by withdrawing funds from IRAs or borrowing from their 401(k) programs. Be sure to learn about the tax ramifications, your obligation for repaying funds, and any early withdrawal penalties.

Ask for assistance from generous family members. First-time buyers are often lucky enough to receive help with their down payment assistance from giving family members who may be eager to help get them in their own home. Your family members may be eager to help you reach the milestone of having your own home.

Contact housing finance agencies. These agencies offer special mortgage programs for low and moderate-income homebuyers, buyers with an interest in remodeling a home within a specific area, and additional particular types of buyers as specified by each finance agency. Working with this kind of agency, you may get a below market interest rate, down payment assistance and other advantages. Housing finance agencies can help you with a reduced interest rate, get you your down payment, and provide other assistance. These non-profit programs to promote home ownership in particular places.

Find out about low-down and no-down mortgages.

• Federal Housing Administration (FHA) mortgages

  The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in assisting low and moderate-income buyers qualify for mortgages. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals in getting mortgages. FHA aids first-time buyers and others who would not be able to qualify for a typical mortgage on their own, by offering mortgage insurance to lenders. Down payment amounts for FHA mortgages are lower than those with traditional mortgage loans, even though these loans have average rates of interest. The required down payment may go as low as 3 percent and the closing costs could be covered by the mortgage loan.

• VA loans

  With a guarantee from the Department of Veterans Affairs, a VA loan is offered to veterens and service people. This special loan does not require a down payment, has mimimal closing costs, and provides a competitive rate of interest. Although the loans aren't actually financed by the VA, the department verfifies borrowers by providing eligibility certificates.

• Piggy-back loans

  You can finance a 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 purchase amount, and the first mortgage finances 80 percent. The homebuyer pays the remaining 10%, instead of come up with the typical 20% down payment.

• Carry-Back loans

  We a seller carries back a second mortgage, the seller loans you part of his or her equity. The buyer finances the majority of the purchase price with a traditional mortgage program and finances the remaining funds with the seller. Generally, this form of second mortgage has higher interest.

No matter your method of putting together your down payment, the thrill of reaching the goal of owning your own home will be just as sweet!

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