Your Down Payment
Many buyers can easily qualify for several different kinds of mortgages, but they don't have a lot of cash to put up the standard down payment. Here are a few ways to get together your down payment
Slash your budget and build up savings. Turn your budget upside-down to uncover ways you can cut expenses to save for your down payment. You could also try enrolling in an automatic savings plan to have a percentage of your pay automatically deposited into savings. Some effective strategies to put together funds include moving into a residence that is less expensive, and skipping a year's vacation.
Work a second job and sell items you don't need. Perhaps you can find a second job and build up your earnings. In addition, you can make a comprehensive inventory of items you can sell. Broken gold jewelry can be sold at local jewelers. Multiple small items may add up to a nice sum at a garage or tag sale. Also, you can consider selling any investments you own.
Borrow from your retirement plan. Investigate the parameters of your retirement plan. Some homebuyers get down payment money from withdrawing funds from Individual Retirement Accounts or getting money out of 401(k) programs. Be sure to learn about the tax consequences, repayment terms, and early withdrawal penalties.
Ask for help from members of your family. First-time homebuyers somtimes receive down payment help from gracious parents and other family members who may be eager to help get them in their own home. Your family members may be pleased to help you reach the milestone of owning your first home.
Research housing finance agencies. Special mortgage programs are extended to homebuyers in specific circumstances, such as low income homebuyers or future homeowners planning to improve houses in a targeted part of town, among others. Financing with a housing finance agency, you may be given an interest rate that is below market, down payment help and other perks. These kinds of agencies can assist eligible homebuyers with a lower interest rate, get you your down payment, and provide other assistance. These non-profit agencies were established to boost community in particular areas.
Learn 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 an important part in assisting low to moderate-income families get mortgages. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals in qualifying for home financing.
FHA provides mortgage insurance to the private lenders, ensuring the buyers are eligible for a home loan.
Interest rates with an FHA mortgage normally feature the current interest rate, while the down payment amounts with an FHA loan will be below those of conventional loans. Closing costs might be financed in the mortgage, and the down payment can be as low as 3 percent of the total.
- VA mortgages
VA loans are backed by the U.S. Department of Veterans Affairs. Veterens and service people can get a VA loan, which usually offers a reasonable fixed interest rate, no down payment, and limited closing costs. Although the VA does not actually provide the loans, it does certify eligibility to qualify for a VA mortgage.
- Piggy-back loans
A piggy-back loan is a second mortgage that closes with the first. Generally the first mortgage covers 80% of the cost of the home and the "piggyback" funds 10%. The borrower pays the remaining 10%, instead of putting the typical 20% down payment.
- Carry-Back loans
With a carry-back mortgage, the seller loans you part of his or her home equity. The buyer funds the highest percentage of the purchase price through a traditional mortgage program and finances the remaining funds with the seller. Generally, this type of second mortgage will have higher interest.
The feeling of accomplishment will be the same, no matter which strategy you use to put together your down payment. Your brand new home will be your reward!
Need to talk about your down payment? Call us at 4056158543.