Putting Together Your Down Payment

Lots of borrowers can qualify for various loan programs, but they don't have a lot of money to put up a down payment. Start here

Reduce expenses and save. Turn your budget upside-down to discover ways you can cut expenses to save for your down payment. You might also decide to enroll in an automatic savings plan to have a percentage of your pay automatically moved into savings. Some practical methods to put together funds include moving into less expensive housing, and staying local for your vacation this year.

Sell things you do not really need and get a part-time job. Try to find a second job. This can be rough, but the temporary trial can provide your down payment money. You can also seriously consider the possessions you actually need and the items you can sell. A closetful of small items can add up to a fair amount at a garage or tag sale. You can also explore what your investments could bring if sold.

Borrow from your retirement plan. Explore the specifics for your individual plan. Many people get down payment money from withdrawing what they need from Individual Retirement Accounts or borrowing from 401(k) programs. Make sure you comprehend the tax ramifications, repayment terms, and any early withdrawal penalties.

Request a generous gift from your family. Many buyers are often lucky enough to receive down payment help from caring family members who are eager to help them get into their own home. Your family members may be eager to help you reach the milestone of having your first home.

Contact housing finance agencies. Provisional loan programs are offered to buyers in certain situations, such as low income homebuyers or people looking to improve houses in a specific area, among others. With the help of this kind of agency, you probably will get an interest rate that is below market, down payment assistance and other advantages. These kinds of agencies can assist you with a lower rate of interest, help with your down payment, and provide other assistance. The central purpose of not-for-profit housing finance agencies is to boost the purchase of homes in specific areas.

Explore no-down and low-down mortgages.

• FHA mortgage loans

  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 assisting low to moderate-income Americans get mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals who wish to get mortgage loans. FHA helps first-time homebuyers and others who might not be able to qualify for a conventional mortgage loan on their own, by offering mortgage insurance to lenders. Down payment sums for FHA loans are less than those of conventional mortgages, even though these mortgages have average interest rates. The down payment may be as low as 3 percent and the closing costs could be packaged in the mortgage.

• VA mortgages

  VA loans are guaranteed by the U.S. Department of Veterans Affairs. Veterens and service people are eligible for a VA loan, which generally offers a competitive interest rate, no down payment, and reduced closing costs. Even though the mortgages are not actually provided by the VA, the office verfifies applicants by issuing eligibility certificates.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes at the same time as the first. Often the first mortgage is for 80% of the cost of the home and the "piggyback" funds 10%. In contrast to the traditional 20 percent down payment, the homebuyer just has to pull together the remaining 10 percent.

• Carry-Back loans

  We a seller carries back a second mortgage, the seller loans you part of his or her home equity. The buyer finances most of the purchase price through a traditional mortgage program and borrows the remaining funds from the seller. Typically you will pay a slightly higher rate with the loan financed by the seller.

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

Need to talk about down payments? Give us a call at 9094671090.