Your Down Payment
Many buyers qualify for a mortgage loan, but they can't afford a large down payment. Do you want to look into getting a new house, but aren't sure how to get together your down payment?
Reduce expenses and save. Turn your budget inside out to uncover ways you can cut expenses to save for your down payment. Also, you can look into bank programs through which some of your take-home pay is automatically transferred into savings every pay period. Some effective strategies to build up funds include moving into housing that is less expensive, and staying local for your family vacation this year.
Sell items you don't need and find a part-time job. Maybe you can find a second job to get your down payment money. In addition, you can make an exhaustive list of items you can sell. Broken gold jewelry can bring a good amount from local jewelers. Multiple 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. Explore the details of your particular plan. You can borrow money from a 401(k) for you down payment or withdraw from an Individual Retirement Account. Be sure you understand about any penalties, the effect this may have on your income taxes, and repayment obligation.
Ask for a gift from your family. Many homebuyers somtimes get down payment assistance from gracious parents and other family members who may be able to help them get into their own home. Your family members may be pleased to help you reach the milestone of buying your first home.
Learn about housing finance agencies. Special loan programs are extended to homebuyers in specific situations, such as low income buyers or future homeowners planning to remodel houses in a certain area, among others. Financing through this type of agency, you probably will be given a below market interest rate, down payment assistance and other advantages. Housing finance agencies can assist you with a reduced interest rate, help with your down payment, and provide other advantages. These non-profit programs to boost community in certain places.
Find out about low-down and no-down mortgage loan programs.
- FHA mortgages
The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays a critical part in aiding low and moderate-income individuals get mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals in qualifying for mortgages.
FHA provides mortgage insurance to private lenders, enabling homebuyers who may not qualify for a traditional mortgage, to get a mortgage.
Down payment amounts for FHA mortgages are below those for typical mortgage loans, even though these mortgages come with current rates of interest. Closing costs can be covered by the mortgage, and your down payment could be as low as 3% of the purchase price.
- VA mortgage loans
Guaranteed by the Department of Veterans Affairs, a VA loan is offered to service people and veterans. This special loan requires no down payment, has mimimal closing costs, and provides a competitive rate of interest. While it's true that the mortgages are not actually issued by the VA, the office certifies borrowers by issuing eligibility certificates.
- Piggy-back loans
You can fund a down payment through a second mortgage that closes with the first. Usually the piggyback loan takes care of 10 percent of the purchase price, while the first mortgage covers 80 percent. The borrower covers the remaining 10%, instead of putting the typical 20% down payment.
- Carry-Back loans
With a carry-back mortgage, the you borrow part of the seller's home equity.. The buyer funds the highest percentage of the purchase price through a traditional mortgage program and borrows the remaining funds from the seller. Typically you will pay a slightly higher rate on the loan financed by the seller.
The satisfaction will be the same, no matter how you manage to put together your down payment. Your new home will be well worth it!
Need to talk about your down payment? Call us: 719-357-6601.