Putting Together Your Down Payment

Lots of borrowers can easily qualify for a loan, but they don't have much to put up a down payment. Here are a few straightforward ways to put together a down payment

Reduce expenses and save. Look for ways you can reduce your expenditures to put away money for a down payment. You might also try enrolling in an automatic savings plan to automatically have a specific portion of your take-home pay deposited into a savings account. Some practical ways to save additional funds include moving into less expensive housing, and skipping your vacation for a year or two.

Work a second job and sell items you don't need. Perhaps you can find a second job to get your down payment money. In addition, you can make a comprehensive list of things you can sell. Broken gold jewelry can be sold at local jewelry stores. Maybe you own desirable items you can sell on an online auction, or quality household items for a garage or tag sale. Also, you can look into selling any investments you own.

Borrow money from your retirement plan. Research the specifics for your individual plan. It is possible to borrow money from a 401(k) for a down payment or perform a withdrawal from an IRA. Make sure to find out about the tax ramifications, your obligation for repaying funds, and any early withdrawal penalties.

Request a generous gift from your family. First-time buyers somtimes get help with their down payment assistance from giving family members who are eager to help get them in their own home. Your family members may be pleased to help you reach the goal of having your own home.

Research housing finance agencies. These types of agencies provide provisional mortgage programs for low and moderate-income buyers, buyers with an interest in remodeling a house in a targeted area, and other particular types of buyers as defined by the finance agency. With the help of this type of agency, you can get an interest rate that is below market, down payment help and other benefits. Housing finance agencies can assist eligible homebuyers with a lower interest rate, help with your down payment, and offer other advantages. These non-profit programs were established to build up home ownership in specific neighborhoods.

Explore no-down and low-down mortgage loans.

• FHA loans

  The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in helping low and moderate-income Americans qualify for mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA aids first-time homebuyers and others who may not be eligible for a conventional mortgage loan by themselves, by offering mortgage insurance to private lenders. Down payment sums for FHA loans are less than those with typical mortgage loans, although these loans have average interest rates. The down payment may go as low as 3 percent while the closing costs can be packaged in the mortgage.

• VA mortgage loans

  With a guarantee from the Department of Veterans Affairs, a VA loan qualifies veterens and service people. This specialized loan requires no down payment, has mimimal closing costs, and offers a competitive rate of interest. Even though the VA doesn't actually issue the loans, it does issue a certificate of eligibility to qualify for a VA loan.

• Piggy-back loans

  You may finance a down payment with a second mortgage that closes along with the first. Often the first mortgage covers 80% of the purchase price and the "piggyback" is for 10%. The homebuyer pays the remaining 10%, rather than come up with the typical 20% down payment.

• 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. Often, this type of second mortgage has higher interest.

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

Need to talk about your down payment? Give us a call at 7193576601.