Your Down Payment

Many borrowers qualify for several different kinds of mortgages, but they can't afford a large down payment. Here's where you start

Slash your budget and build up savings. Be on the look-out for ways to trim your expenses to set aside money for a down payment. There are bank programs in which a portion of your take-home pay is automatically placed into savings each pay period. Some practical methods to save additional funds include moving into housing that is less expensive, and staying home for your vacation this year.

Sell items you don't need and find a part-time job. Perhaps you can find a second job to get your down payment money. Additionally, you can make a comprehensive inventory of items you may be able to sell. Broken gold jewelry can be sold at local jewelers. Multiple small items can add up to a nice sum at a garage or tag sale. Also, you might want to consider selling any investments you hold.

Borrow from your retirement funds. Check the parameters of your retirement plan. You can borrow money from a 401(k) plan for you down payment or perform a withdrawal from an Individual Retirement Account. Be sure you are clear about any penalties, the effect this could have on income taxes, and repayment obligation.

Ask for help from generous family members. First-time homebuyers are sometimes 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 pleased to help you reach the milestone of owning your own home.

Contact housing finance agencies. Provisional loan programs are offered to buyers in certain situations, like low income buyers or buyers planning to remodel homes in a targeted place, among others. Financing through this type of agency, you can be given a below market interest rate, down payment help and other perks. These kinds of agencies may help eligible homebuyers with a reduced rate of interest, help with your down payment, and offer other benefits. The principal mission of non-profit housing finance agencies is promoting residential ownership in specific areas.

Find out about low-down and no-down mortgages.

• Federal Housing Administration (FHA) mortgage loans

  The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in aiding low and moderate-income individuals get mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals in qualifying for home financing. FHA provides mortgage insurance to private lenders, enabling buyers who might not qualify for a traditional mortgage, to receive a mortgage. Down payment totals for FHA loans are less than those of typical mortgage loans, even though these mortgages have current rates of interest. The down payment may go as low as three percent and the closing costs may be covered by the mortgage.

• VA loans

  VA loans are guaranteed by the Department of Veterans Affairs. Veterens and service people are eligible for a VA loan, which generally offers a low fixed rate of interest, no down payment, and reduced closing costs. Even though the VA doesn't actually provide the loans, it does certify eligibility to apply for a VA mortgage.

• Piggy-back loans

  You may fund your down payment using a second mortgage that closes along with the first. Most of the time, the first mortgage covers 80% of the purchase price and the "piggyback" funds 10%. The homebuyer covers the remaining 10%, rather than putting the typical 20% down payment.

• Carry-Back loans

  In a "carry back" situation, the seller commits to loan you a portion of his own equity to help you with your down payment money. The buyer finances most of the purchase price with a traditional mortgage program and finances the remaining funds with the seller. Typically, this kind 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!

Want to discuss down payments? Give us a call: 9094671090.