Putting Together Your Down Payment

Lots of buyers qualify for a mortgage loan, but they don't have much to pay the standard down payment. Here are a few ways to get together a down payment

Cut expenses and save. Look for ways you can trim your monthly expenditures to set aside funds for a down payment. There are bank programs through which some of your take-home pay is automatically transferred into savings each pay period. Some practical approaches to save additional funds include moving into a residence that is less expensive, and staying local for your family vacation this year.

Sell things you do not really need and find a part-time job. Maybe you can get a second job to get your down payment money. In addition, you can make a comprehensive list of items you may be able to sell. Unworn gold jewelry can be sold at local jewelry stores. Multiple small things could add up to a fair amount at a garage or tag sale. Also, you can think about selling any investments you own.

Borrow money from a retirement plan. Check the parameters of your specific plan. Many homebuyers get down payment money by withdrawing funds from their IRAs or taking money out of 401(k) programs. Be sure you understand about any penalties, the effect this could have on your taxes, and repayment obligation.

Ask for help from generous members of your family. First-time buyers somtimes receive down payment help from thoughtful parents and other family members who may be able to help them get into their first home. Your family members may be willing to help you reach the goal of owning your first home.

Contact housing finance agencies. Provisional loan programs are offered to buyers in certain situations, such as low income buyers or buyers planning to remodel homes in a particular 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 incentives. These kinds of agencies may assist you with a reduced interest rate, help with your down payment, and provide other advantages. The main mission of not-for-profit housing finance agencies is to boost residence ownership in targeted areas.

Explore no-down and low-down mortgage loans.

• 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 an important part in helping low and moderate-income families get mortgage loans. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids homebuyers who need to get home financing. FHA provides mortgage insurance to the private lenders, enabling buyers who may not qualify for a typical loan, to get financing. Down payment sums for FHA mortgages are lower than those with typical mortgages, even though these mortgages come with current interest rates. Closing costs can be financed within the mortgage, and your down payment could be as low as 3% of the total.

• VA mortgage loans

  With a guarantee from the Department of Veterans Affairs, a VA loan is offered to service people and veterans. This specialized loan does not require a down payment, has reduced closing costs, and offers a competitive rate of interest. While the loans don't originate from the VA, the office certifies applicants by issuing eligibility certificates.

• Piggy-back loans

  You may fund your down payment using a second mortgage that closes with the first. Most of the time, the piggyback loan takes care of 10 percent of the home's price, and the first mortgage covers 80 percent. The homebuyer covers the remaining 10%, rather than come up with the typical 20% down payment.

• Carry-Back loans

  In a "carry back" agreement, the seller commits to loan you a portion of his home equity to help you with your down payment funds. The buyer funds the majority of the purchase price with a traditional mortgage program and finances the remaining funds with the seller. Usually this type of second mortgage has higher interest.

Want to discuss your down payment? Give us a call: 4056158543.