Building Your Down Payment

Many people who are looking to purchase a new house qualify for a loan, but they don't have much to pay the standard down payment. Do you want to buy a new house, but don't know how you should get together a down payment?

Tighten your belt and save. Turn your budget upside-down to uncover extra money to save for your down payment. You might also try enrolling in an automatic savings plan at your bank to automatically have a specific amount from your paycheck deposited into your savings account. Some effective approaches to save additional funds include moving into housing that is less expensive, and skipping a year's vacation.

Sell things you do not really need and find a part-time job. Perhaps you can find a second job to get your down payment money. Additionally, you can put together a comprehensive list of items you may be able to sell. Unused gold jewelry can be sold at local jewelers. A closetful of small items might add up to a nice sum at a garage or tag sale. Also, you might want to think about selling any investments you hold.

Tap into your retirement funds. Investigate the provisions of your retirement plan. It is possible to pull out funds from a 401(k) plan for you down payment or withdraw from an Individual Retirement Account. Be sure you understand the tax ramifications, your obligation for repaying funds, and any early withdrawal penalties.

Ask for assistance from family members. Many buyers somtimes receive help with their down payment assistance from thoughtful family members who are prepared to help them get into their first home. Your family members may be pleased to help you reach the goal of buying your own home.

Research housing finance agencies. Provisional loan programs are given to homebuyers in certain situations, like low income buyers or people looking to remodel homes in a specific neighborhood, among others. With the help of this type of agency, you may be given a below market interest rate, down payment help and other perks. Housing finance agencies may assist eligible homebuyers with a reduced interest rate, help with your down payment, and offer other assistance. The primary mission of not-for-profit housing finance agencies is to promote the purchase of homes in targeted areas.

Explore no-down and low-down mortgages.

• 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 vital part in assisting low to moderate-income Americans get mortgage loans. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals who need to get mortgage loans. FHA aids first-time buyers and others who might not be able to qualify for a traditional loan on their own, by offering mortgage insurance to the lenders. Interest rates for an FHA mortgage are typically the market interest rate, but the down payment amounts with an FHA mortgage will be lower than those of conventional loans. Closing costs can be financed in the mortgage, and your down payment could be as low as 3 percent of the total.

• VA loans

  With a guarantee from the Department of Veterans Affairs, a VA loan is offered to veterens and service people. This specialized loan does not require a down payment, has mimimal closing costs, and provides the advantage of a competitive interest rate. Even though the mortgage loans don't originate from the VA, the office verfifies borrowers by providing eligibility certificates.

• Piggy-back loans

  You can fund your down payment using a second mortgage that closes at the same time as the first. Most of the time, the first mortgage is for 80% of the purchase amount and the "piggyback" funds 10%. The homebuyer covers the remaining 10%, instead of having to pull together the typical 20% down payment.

• Carry-Back loans

  In a "carry back" agreement, the seller agrees to lend you some of his home equity to assist you with your down payment money. You would finance the majority of the purchase price with a traditional mortgage lending institution and borrow the remaining amount from the seller. Generally, this type of second mortgage has higher interest.

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