Your Down Payment
Lots of borrowers qualify for a loan, but they can't afford a large down payment. Here are a few tips:
Tighten your belt and save. Look for ways to trim your monthly expenditures to save toward a down payment. There are bank programs through which some of your take-home pay is automatically transferred into a savings account every pay period. You might look into some big expenses in your budget that you can live without, or trim, at least temporarily. For example, you might move into less expensive housing, or skip a vacation.
Work a second job and sell things you do not need. Look for a second job. This can be exhausting, but the temporary trial can help you get your down payment. In addition, you can make a comprehensive list of things you can sell. Broken gold jewelry can bring a good price from local jewelry stores. A closetful of small items can add up to a nice sum at a garage or tag sale. Also, you might want to think about selling any investments you own.
Borrow money from a retirement plan. Research the specifics for your particular plan. You may pull out funds from a 401(k) for a down payment or get a withdrawal from an IRA. You will want to be sure you know about any penalties, the way this could affect on your taxes, and repayment terms.
Ask for assistance from generous family members. Many homebuyers somtimes get down payment help from giving parents and other family members who are eager to help get them in their own home. Your family members may be happy at the chance to help you reach the milestone of having your own home.
Contact housing finance agencies. Special mortgate loan programs are extended to homebuyers in specific circumstances, such as low income purchasers or homebuyers looking to renovating homes in a specific place, among others. Working with this type of agency, you can get a below market interest rate, down payment assistance and other incentives. Housing finance agencies may assist you with a reduced rate of interest, get you your down payment, and offer other assistance. These non-profit programs exist to build up home ownership in particular neighborhoods.
Research no-down and low-down mortgage loan programs.
- FHA mortgage loans
The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays a significant role in assisting low to moderate-income buyers get mortgages. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get
FHA assists first-time homebuyers and others who may not be able to qualify for a traditional mortgage by themselves, by offering mortgage insurance to the private lenders.
Interest rates with an FHA mortgage normally feature the market interest rate, but the down payment amounts with an FHA loan are less than those of conventional loans. Closing costs can be included in the mortgage, while your down payment can be as low as 3% of the purchase price.
- VA loans
VA loans are guaranteed by the Department of Veterans Affairs. Veterens and service people are eligible for a VA loan, which usually offers a low fixed interest rate, no down payment, and minimal closing costs. While it's true that the mortgages are not actually issued by the VA, the office verfifies borrowers by issuing eligibility certificates.
- Piggy-back loans
A piggy-back loan is a second mortgage that closes with the first. Most of the time, the first mortgage covers 80% of the purchase price and the "piggyback" funds 10%. The borrower covers 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 home equity. The buyer funds most of the purchase price through a traditional mortgage program and borrows the remaining funds from the seller. Generally, this type of second mortgage has a higher rate of interest.
No matter how you gather your down payment money, the thrill of reaching the goal of living in your own home will be just as great!
Need to talk about your down payment? Call us: (904) 342-3622.