Your Down Payment

Lots of folks who would like to buy a new house can easily qualify for various loan programs, but they can't afford a large down payment. Want to look into getting a new home, but aren't sure how you should get together a down payment?

Reduce expenses and save. Scrutinize the budget to discover extra money to go toward your down payment. There are bank programs in which a portion of your paycheck is automatically deposited into a savings account every pay period. You would be wise to look into some big expenses in your spending history that you can live without, or trim, at least temporarily. For example, you may move into less expensive housing, or skip a family vacation.

Sell things you don't really need and find a part-time job. Try to find a second job. This can be exhausting, but the temporary trial can provide your down payment money. You can also seriously consider the possessions you actually need and the things you can put up for sale. A closetful of small items may add up to a nice sum at a garage or tag sale. You can also look into what any investments you hold will sell for.

Borrow from your retirement plan. Explore the specifics for your individual plan. It is possible to borrow funds from a 401(k) for a down payment or withdraw from an Individual Retirement Account. Make sure to ask your plan representative about the tax ramifications, your obligation for repayment, and any penalties for withdrawing early.

Ask for help from generous members of your family. First-time homebuyers somtimes receive help with their down payment assistance from giving family members who are willing to help them get into their first home. Your family members may be inclined to help you reach the milestone of owning your first home.

Learn about housing finance agencies. Provisional mortgate loan programs are given to buyers in specific circumstances, like low income purchasers or buyers looking to improve homes in a particular area, among others. With the help of this type of agency, you may get an interest rate that is below market, down payment assistance and other incentives. These kinds of agencies may help you with a lower interest rate, get you your down payment, and provide other assistance. These non-profit agencies were formed to promote the value of homes in specific places.

Explore no-down and low-down mortgage loans.

• Federal Housing Administration (FHA) loans

  The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays a vital role in assisting low and moderate-income individuals qualify for mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids homebuyers in getting mortgage loans. FHA assists first-time homebuyers and others who would not be able to qualify for a traditional mortgage loan by themselves, by offering mortgage insurance to the private lenders. Interest rates with an FHA loan are generally the market interest rate, while the down payment amounts with an FHA mortgage will be below those of conventional loans. The down payment may be as low as three percent and the closing costs may be financed in the mortgage loan.

• VA mortgages

  With a guarantee from the Department of Veterans Affairs, a VA loan qualifies veterens and service people. This particular loan does not require a down payment, has mimimal closing costs, and provides the benefit of a competitive rate of interest. While the mortgage loans don't originate from the VA, the department verfifies applicants by issuing eligibility certificates.

• Piggy-back loans

  A piggy-back loan is a second mortgage that you close along with the first. Most of the time, the piggyback loan is for 10 percent of the purchase price, while the first mortgage finances 80 percent. Instead of the traditional 20 percent down payment, the buyer will just have to cover the remaining 10 percent.

• Carry-Back loans

  In a "carry back" mortgage, the seller agrees to loan you part of his own equity to help you get your down payment money. In this scenario, you would borrow the majority of the purchase price from a traditional lender and borrow the remaining amount from the seller. Usually you will pay a somewhat higher interest rate with the loan from the seller.

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

Want to discuss the best options for down payments? Give us a call: 9094671090.