Putting Together Your Down Payment

Lots of buyers can easily qualify for several different kinds of mortgages, but they can't afford a large down payment. We have a few ideas

Reduce expenses and save. Look for ways to reduce your expenditures to save toward a down payment. You might also decide to enroll in an automatic savings plan at your bank to automatically have a predetermined portion of your paycheck deposited into savings. Some practical ways to build up funds include moving into less expensive housing, and staying local for your vacation for a year or two.

Work more and sell items you don't need. Perhaps you can get a second job to get your down payment money. You can also get serious about the possessions you actually need and the items you could be able to sell. Maybe you have desirable items you can put up for sale at an auction website, or household goods for a garage or tag sale. Also, you can look into selling any investments you own.

Borrow money from a retirement plan. Explore the specifics of your particular plan. You may take out money from a 401(k) for you down payment or withdraw from an IRA. Be sure you comprehend the tax consequences, your obligation for repaying the money, and early withdrawal penalties.

Ask for a generous gift from family. First-time homebuyers somtimes get help with their down payment assistance from thoughtful family members who may be prepared to help them get into their first home. Your family members may be eager to help you reach the goal of owning your own home.

Research housing finance agencies. Special mortgage programs are provided to homebuyers in certain situations, like low income purchasers or homebuyers looking to renovating homes in a specific neighborhood, among others. Financing with a housing finance agency, you may receive an interest rate that is below market, down payment assistance and other advantages. Housing finance agencies may help eligible buyers with a lower rate of interest, get you your down payment, and offer other assistance. The main goal of non-profit housing finance agencies is to promote residence ownership in particular places.

Learn about low-down and no-down mortgages.

• Federal Housing Administration (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 part in aiding low and moderate-income buyers get 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 would not be eligible for a conventional mortgage on their own, by providing mortgage insurance to the lenders. Down payment totals for FHA loans are lower than those of traditional mortgage loans, even though these loans hold current interest rates. The down payment can go as low as 3 percent while the closing costs may be financed in the mortgage loan.

• VA mortgage loans

  VA loans are backed by the U.S. Department of Veterans Affairs. Veterens and service people can receive a VA loan, which generally offers a reasonable interest rate, no down payment, and reduced closing costs. While the VA doesn't actually finance the mortgage 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 you close with the first. In most cases the first mortgage covers 80% of the purchase amount and the "piggyback" is for 10%. The homebuyer pays the remaining 10%, instead of come up with the typical 20% down payment.

• Carry-Back loans

  In a "carry back" situation, the seller agrees to loan you a piece of his home equity to help you get your down payment funds. The buyer funds the highest percentage of the purchase price through a traditional mortgage program and borrows the remainder from the seller. Generally, this kind of second mortgage will have a higher rate of interest.

No matter how you gather your down payment funds, the thrill of reaching the goal of owning your own home will be just as sweet!

Want to discuss down payment options? Call us: 9043423622.