Your Down Payment

Many people who are looking to buy a new house can qualify for a mortgage loan, but they can't afford a large down payment. Do you want to buy a new home, but don't know how you should put together your down payment?

Slash the budget and build up savings. Look for ways you can reduce your monthly expenses to set aside funds for a down payment. Also, you can look into bank programs through which some of your paycheck is automatically placed into a savings account every pay period. Some effective strategies to save additional funds include moving into housing that is less expensive, and skipping a year's vacation.

Work a second job and sell items you don't need. Try to get a second job. This can be exhausting, but the temporary trial can provide your down payment money. Additionally, you can make a comprehensive inventory of things you may be able to sell. Unworn gold jewelry can bring a good amount from local jewelers. Multiple small things can add up to a nice sum at a garage or tag sale. You might also look into what your investments could bring if sold.

Tap into retirement funds. Investigate the provisions of your retirement plan. Some people get down payment money from withdrawing what they need from their IRAs or borrowing from their 401(k) plans. Make sure to learn about the tax ramifications, repayment terms, and penalties for withdrawing early.

Ask for help from generous members of your family. First-time buyers somtimes get down payment assistance from gracious parents and other family members who are eager to help them get into their first home. Your family members may be pleased to help you reach the milestone of buying your first home.

Learn about housing finance agencies. These agencies offer provisional mortgage loans for low and moderate-income homebuyers, buyers interested in remodeling a house in a particular area, and other certain kinds of buyers as defined by the agency. With the help of a housing finance agency, you probably will be given an interest rate that is below market, down payment help and other incentives. Housing finance agencies may assist you with a reduced interest rate, help with your down payment, and provide other assistance. These non-profit agencies exist to boost community in particular places.

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

• FHA mortgages

  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 families qualify for mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA helps first-time homebuyers and others who might not be eligible for a conventional loan on their own, by providing mortgage insurance to the private lenders. Interest rates for an FHA mortgage usually feature the current interest rate, but the down payment amounts with an FHA loan will be lower than those of conventional loans. The down payment can be as low as three percent while the closing costs may be financed in the mortgage loan.

• VA mortgage loans

  VA loans are guaranteed by the U.S. Department of Veterans Affairs. Veterens and service people can benefit from a VA loan, which usually offers a low fixed rate of interest, no down payment, and minimal closing costs. Although the VA does not actually provide the mortgage loans, it does issue a certificate of eligibility to qualify for a VA mortgage.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes at the same time as the first. Usually the first mortgage is for 80% of the cost of the home and the "piggyback" funds 10%. The homebuyer pays the remaining 10%, rather than come up with the usual 20% down payment.

• Carry-Back loans

  In the case of the seller "carrying 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 lender and finance the remaining amount with the seller. Typically, this type of second mortgage will have a higher rate of interest.

Want to discuss down payments? Call us: 7193576601.