Your Down Payment

Lots of buyers can easily qualify for various loan programs, but they don't have a large sum of cash to put up a down payment. We have a few ideas

Slash the budget and build up savings. Look for ways to trim your monthly expenses to set aside funds for a down payment. You could also try enrolling in an automatic savings plan at your bank to automatically have a predetermined amount from your paycheck moved into savings. 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 a second job. This can be exhausting, but the temporary difficulty can help you get your down payment. You can also get serious about the possessions you actually need and the items you can sell. You may have collectibles you can put up for sale on an online auction, or household goods for a tag or garage sale. Also, you can think about selling any investments you own.

Borrow from a retirement plan. Check the provisions of your particular plan. It is possible to take out funds from a 401(k) plan for you down payment or make a withdrawal from an IRA. Be sure you know about any penalties, the way this may affect on income taxes, and repayment terms.

Request a gift from family. First-time buyers are sometimes lucky enough to get help with their down payment assistance from thoughtful parents and other family members who may be eager to help get them in their own home. Your family members may be willing to help you reach the goal of owning your first home.

Learn about housing finance agencies. These types of agencies provide special loan programs to low and moderate-income homebuyers, buyers with an interest in rehabilitating a residence in a specific area, and other particular types of buyers as specified by the agency. With the help of a housing finance agency, you can receive an interest rate that is below market, down payment help and other perks. These kinds of agencies may assist you with a lower rate of interest, get you your down payment, and offer other advantages. These non-profit agencies were formed to promote home ownership in particular areas.

Learn about low-down and no-down mortgages.

• FHA mortgages

  The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in aiding low to moderate-income buyers qualify for mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids homebuyers in qualifying for mortgages. FHA provides mortgage insurance to private lenders, ensuring the buyers are eligible for a mortgage. Down payment requirements for FHA mortgages are below those of traditional mortgages, even though these loans hold average rates of interest. The down payment can go as low as three percent and the closing costs may be covered by the mortgage loan.

• VA loans

  VA loans are guaranteed by the U.S. Department of Veterans Affairs. Veterens and service people can get a VA loan, which generally offers a competitive rate of interest, no down payment, and minimal closing costs. Even though the VA does not finance the loans, it does issue a certificate of eligibility to apply for a VA loan.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes with the first. Generally the piggyback loan is for 10 percent of the home's amount, and the first mortgage covers 80 percent. The borrower covers the remaining 10%, rather than having to pull together the usual 20% down payment.

• Carry-Back loans

  With a carry-back mortgage, the seller loans you part of his or her equity. In this scenario, you would borrow the largest portion of the purchase price from a traditional mortgage lender and finance the remaining amount with the seller. Typically, this kind of second mortgage will have higher interest.

Want to discuss down payment options? Give us a call: 9043423622.