Your Down Payment

Many folks who would like to buy a new house can easily qualify for a mortgage loan, but they don't have much to put up the standard down payment. Want to buy a new home, but don't know how you should put together your down payment?

Tighten your belt and save. Scrutinize your budget to find extra money to save for your down payment. There are bank programs through which some of your paycheck is automatically placed into savings each pay period. You could look into some big expenses in your budget that you can do without, or reduce, at least temporarily. Here are a couple of examples: you may move into less expensive housing, or stay local for your family vacation.

Work a second job and sell things you do not need. Perhaps you can find an additional job and save your earnings. In addition, you can make an exhaustive list of things you can sell. Unworn gold jewelry can bring a good amount from local jewelry stores. You may have desirable items you can put up for sale at an auction website, or household goods for a garage or tag sale. You might also look into what any investments you own may sell for.

Tap into retirement funds. Research the details for your particular plan. Some homebuyers get down payment money by withdrawing from their Individual Retirement Accounts or getting funds out of their 401(k) plans. You will need to be sure you know about any penalties, the effect this will have on taxes, and repayment obligation.

Ask for assistance from generous members of your family. First-time buyers are often fortunate enough to get down payment help from gracious family members who are able to help get them in their own home. Your family members may be inclined to help you reach the goal of owning your first home.

Learn about housing finance agencies. These types of agencies provide provisional mortgage programs to moderate and low income buyers, buyers interested in rehabilitating a house within a specific area, and additional groups as defined by each agency. Working through this kind of agency, you probably will receive an interest rate that is below market, down payment assistance and other advantages. These types of agencies may assist eligible homebuyers with a reduced interest rate, get you your down payment, and provide other benefits. The primary mission of non-profit housing finance agencies is boosting residence ownership in certain areas.

Explore no-down and low-down mortgages.

• FHA loans

  The Federal Housing Administration (FHA), which is inside the U.S. Department of Housing and Urban Development (HUD), plays a critical role in helping low to moderate-income Americans qualify for mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA assists first-time buyers and others who may not be eligible for a traditional loan on their own, by offering mortgage insurance to lenders. Down payment amounts for FHA loans are lower than those of conventional mortgages, even though these loans have current interest rates. Closing costs may be covered by the mortgage, and the down payment can be as low as 3 percent of the purchase price.

• VA loans

  Guaranteed by the Department of Veterans Affairs, a VA loan is offered to veterens and service people. This special loan does not require a down payment, has mimimal closing costs, and provides a competitive rate of interest. Even though the VA doesn't provide the loans, it does certify eligibility to qualify for a VA mortgage.

• Piggy-back loans

  You may finance your down payment through a second mortgage that closes along with the first. Generally the piggyback loan takes care of 10 percent of the home's amount, while the first mortgage covers 80 percent. The homebuyer pays the remaining 10%, instead of putting the typical 20% down payment.

• Carry-Back loans

  We a seller carries back a second mortgage, the seller loans you part of his or her equity. In this scenario, you would finance the majority of the purchase price with a traditional lending institution and borrow the remainder from the seller. Typically you'll pay a slightly higher interest rate on the loan financed by the seller.

Need to talk about the best options for down payments? Call us at 4056158543.