Building Your Down Payment

Lots of borrowers can qualify for various loan programs, but they don't have a large sum of cash to put up the standard down payment. Below are a few straightforward methods that will help you get together a down payment

Tighten your belt and save. Be on the look-out for ways you can trim your expenses to put away money for a down payment. Also, you can look into bank programs in which some of your paycheck is automatically deposited into a savings account each pay period. You would be wise to look into some big expenses in your spending history that you can give up, or reduce, at least temporarily. For example, you might decide to move into less expensive housing, or stay close to home for your family vacation.

Work a second job and sell things you don't need. Look for an additional job. This can be rough, but the temporary difficulty 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. Multiple small items could add up to a nice sum at a garage or tag sale. Also, you can think about selling any investments you own.

Borrow from your retirement funds. Explore the details of your individual plan. You can take out funds from a 401(k) plan for you down payment or get a withdrawal from an Individual Retirement Account. Make sure you comprehend the tax ramifications, repayment terms, and early withdrawal penalties.

Ask for a generous gift from family. First-time homebuyers are often fortunate enough to receive help with their down payment assistance from gracious parents and other family members who are eager to help get them in their own home. Your family members may be eager to help you reach the goal of buying your first home.

Contact housing finance agencies. Provisional loan programs are extended to buyers in specific situations, like low income buyers or buyers looking to remodel homes in a particular part of town, among others. Working with this kind of agency, you may get a below market interest rate, down payment help and other incentives. Housing finance agencies can help you with a reduced rate of interest, get you your down payment, and provide other advantages. The central goal of not-for-profit housing finance agencies is build up residence ownership in specific areas.

Find out about low-down and no-down mortgage loans.

• Federal Housing Administration (FHA) loans

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a significant role in aiding low to moderate-income buyers get mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA offers mortgage insurance to the private lenders, enabling homebuyers who will not be eligible for a conventional mortgage loan, to receive a mortgage. Interest rates with an FHA mortgage typically feature the current interest rate, but the down payment with an FHA loan will be lower than those of conventional loans. The down payment can be as low as 3 percent and the closing costs might be financed in the mortgage loan.

• VA mortgage loans

  VA loans are guaranteed by the Department of Veterans Affairs. Service persons and veterans can benefit from a VA loan, which typically offers a low fixed rate of interest, no down payment, and minimal closing costs. Even though the VA does not actually provide the mortgages, it does issue a certificate of eligibility to qualify for a VA loan.

• Piggy-back loans

  A piggy-back loan is a second mortgage that you close at the same time as the first. Usually the first mortgage covers 80% of the cost of the home and the "piggyback" funds 10%. Instead of the usual 20 percent down payment, the homebuyer will just have to pull together the remaining 10 percent.

• Carry-Back loans

  We a seller carries back a second mortgage, the seller loans you part of his or her home equity. The buyer finances most of the purchase price through a traditional mortgage program and borrows the remainder from the seller. Typically, this type of second mortgage will have a higher rate of interest.

No matter how you gather your down payment, the thrill of reaching the goal of living in your own home will be just as great!

Want to discuss your down payment? Call us: 4056158543.