Your Down Payment

Many borrowers can qualify for various loan programs, but they don't have much to pay a down payment. Want to buy a new house, but don't know how you should put together a down payment?

Slash your budget and build up savings. Look for ways you can trim your monthly expenditures to put away money for a down payment. You could also try enrolling in an automatic savings plan at your bank to have a percentage of your payroll automatically transferred into your savings account. Some practical strategies to put together funds include moving into a residence that is less expensive, and staying home for your vacation for a year or two.

Sell items you don't really need and get a part-time job. Try to get a second job. This can be rough, but the temporary difficulty can help you get your down payment. Additionally, you can put together an exhaustive inventory of items you can sell. Unused gold jewelry can be sold at local jewelers. A closetful of small items can add up to a fair amount at a garage or tag sale. You might also look into what your investments could bring if sold.

Tap into retirement funds. Research the details of your particular plan. Many people get down payment money from withdrawing what they need from their IRAs or borrowing from their 401(k) plans. Make sure to find out about the tax consequences, repayment terms, and early withdrawal penalties.

Ask for a gift from your family. First-time homebuyers are often fortunate enough to receive down payment help from thoughtful parents and other family members who may be eager to help them get into their first home. Your family members may be pleased at the chance to help you reach the goal of having your first home.

Research housing finance agencies. These types of agencies provide special mortgage loans for low and moderate-income borrowers, buyers interested in sprucing up a house within a targeted part of the city, and additional groups as specified by each agency. With the help of this kind of agency, you may get an interest rate that is below market, down payment help and other benefits. These types of agencies can assist you with a reduced interest rate, get you your down payment, and offer other assistance. The main goal of not-for-profit housing finance agencies is boosting residential ownership in certain places.

Research no-down and low-down mortgage loan programs.

• Federal Housing Administration (FHA) mortgages

  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 helping low and moderate-income buyers qualify for mortgage loans. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids homebuyers in getting mortgage loans. FHA helps first-time homebuyers and others who may not be able to qualify for a conventional mortgage on their own, by providing mortgage insurance to the lenders. Interest rates with an FHA mortgage normally feature the market interest rate, but the down payment amounts for an FHA mortgage are less than those of conventional loans. The down payment can be as low as three percent while the closing costs could be financed in the mortgage loan.

• VA loans

  Guaranteed by the Department of Veterans Affairs, a VA loan qualifies service people and veterans. This special loan requires no down payment, has mimimal closing costs, and provides a competitive rate of interest. Although the VA does not finance the mortgages, it does issue a certificate of eligibility to apply for a VA loan.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes with the first. Generally the first mortgage covers 80% of the purchase amount and the "piggyback" funds 10%. The borrower pays the remaining 10%, instead of putting the usual 20% down payment.

• Carry-Back loans

  In a "carry back" situation, the seller agrees to lend you a piece of his own equity to help you get your down payment money. The buyer finances the majority of the purchase price with a traditional mortgage program and finances the remaining funds with the seller. Typically you'll pay a somewhat higher rate on the loan from the seller.

No matter your method of getting together your down payment funds, the satisfaction of reaching the goal of living in your own home will be just as sweet!

Need to talk about down payments? Give us a call at 4056158543.