Your Down Payment

Lots of folks who would like to purchase a new house qualify for various loan programs, but they don't have much to pay a down payment. Here are a few tips:

Tighten your belt and save. Be on the look-out for ways you can reduce your monthly expenditures to save toward a down payment. There are bank programs through which a specific portion of your paycheck is automatically placed into a savings account each pay period. Some practical approaches to build up funds include moving into less expensive housing, and skipping a year's vacation.

Work more and sell items you do not need. Maybe you can get an additional job and build up your earnings. You can also get serious about the possessions you really need and the items you can put up for sale. Multiple small things could add up to a fair amount at a garage or tag sale. You can also explore what your investments may sell for.

Borrow money from a retirement plan. Investigate the parameters of your retirement program. Some homebuyers get down payment money from withdrawing funds from Individual Retirement Accounts or pulling funds out of their 401(k) plans. Make sure you understand the tax consequences, your obligation for repaying the money, and possible early withdrawal penalties.

Request a gift from your family. First-time homebuyers are often lucky enough to receive down payment assistance from gracious family members who are willing to help them get into their own home. Your family members may be willing to help you reach the goal of having your first home.

Research housing finance agencies. These agencies provide provisional mortgage loans to moderate and low income buyers, buyers with an interest in sprucing up a house within a targeted part of the city, and additional groups as specified by the agency. With the help of a housing finance agency, you may receive a below market interest rate, down payment help and other incentives. Housing finance agencies can assist eligible buyers with a reduced interest rate, get you your down payment, and provide other benefits. The principal goal of not-for-profit housing finance agencies is build up residence ownership in certain areas.

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

• Federal Housing Administration (FHA) mortgage loans

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a critical part in assisting low and moderate-income families get mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA helps first-time buyers and others who may not be eligible for a traditional mortgage loan on their own, by offering mortgage insurance to the lenders. Interest rates for an FHA mortgage are typically the market interest rate, but the down payment for an FHA loan are below those of conventional loans. Closing costs may be covered by the mortgage, while your down payment might be as low as 3% of the total.

• VA loans

  VA loans are guaranteed by the U.S. Department of Veterans Affairs. Veterens and service people can qualify for a VA loan, which generally offers a low fixed rate of interest, no down payment, and reduced closing costs. While the mortgages don't originate from the VA, the office certifies borrowers by providing eligibility certificates.

• Piggy-back loans

  You may finance your down payment through a second mortgage that closes at the same time as the first. Most of the time, the first mortgage is for 80% of the cost of the home and the "piggyback" funds 10%. The borrower pays the remaining 10%, instead of putting 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. You would finance the majority of the purchase price with a traditional mortgage lender and finance the remaining amount with the seller. Usually you'll pay a somewhat higher interest rate on the loan from the seller.

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

Need to talk about down payments? Give us a call: 9043423622.