Your Down Payment

Lots of people who would like to buy a new home can easily qualify for a loan, but they can't afford a large down payment. Here are a few ideas:

Slash your budget and build up savings. Scrutinize the budget to discover ways you can cut expenses to save for your down payment. There are bank programs through which some of your paycheck is automatically transferred into a savings account each pay period. You could look into some big expenses in your spending history that you can do without, or reduce, at least temporarily. For example, you may move into less expensive housing, or skip a family vacation.

Sell items you don't need and get a part-time job. Try to get a second job. This can be exhausting, but the temporary difficulty can provide your down payment money. Additionally, you can put together a comprehensive list of items you may be able to sell. Broken gold jewelry can bring a good price from local jewelers. A closetful of small items could add up to a fair amount at a garage or tag sale. You can also research what any investments you own will bring if sold.

Borrow money from your retirement plan. Check the provisions of your retirement program. It is possible to borrow funds from a 401(k) for you down payment or withdraw from an Individual Retirement Account. Be sure to learn about the tax ramifications, repayment terms, and possible early withdrawal penalties.

Ask for assistance from members of your family. Many buyers are often fortunate enough to get down payment assistance from thoughtful parents and other family members who may be eager to help get them in their first home. Your family members may be willing to help you reach the goal of buying your own home.

Research housing finance agencies. Provisional mortgage loans are provided to buyers in certain situations, such as low income buyers or future homeowners planning to renovating homes in a targeted neighborhood, among others. With the help of a housing finance agency, you probably will get an interest rate that is below market, down payment help and other incentives. Housing finance agencies may help eligible homebuyers with a lower interest rate, help with your down payment, and offer other assistance. The central purpose of non-profit housing finance agencies is to boost the purchase of homes in particular parts of the city.

Research no-down and low-down mortgage loans.

• FHA loans

  The Federal Housing Administration (FHA), which is inside the U.S. Department of Housing and Urban Development (HUD), plays an important role in aiding low and moderate-income individuals get mortgage loans. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA assists first-time buyers and others who would not be able to qualify for a traditional mortgage loan by themselves, by providing mortgage insurance to the private lenders. Interest rates with an FHA mortgage are usually the going interest rate, while the down payment requirements for an FHA loan will be smaller than those of conventional loans. Closing costs may be included in the mortgage, and the down payment could be as low as 3% of the total.

• VA mortgages

  VA loans are backed by the Department of Veterans Affairs. Veterens and service people can get a VA loan, which generally offers a competitive interest rate, no down payment, and reduced closing costs. Although the mortgage loans aren't actually provided by the VA, the department certifies applicants by issuing eligibility certificates.

• Piggy-back loans

  You can finance your down payment through a second mortgage that closes with the first. Most of the time, the piggyback loan is for 10 percent of the purchase amount, while the first mortgage finances 80 percent. The homebuyer covers the remaining 10%, instead of putting the usual 20% down payment.

• Carry-Back loans

  In the case of the seller "carrying back a second mortgage," the you borrow a portion of the seller's home equity.. The buyer funds the highest percentage of the purchase price with a traditional mortgage program and finances the remaining funds with the seller. Usually you'll pay a slightly higher interest rate with the loan from the seller.

No matter your method of pulling together your down payment, the satisfaction of reaching the goal of living in your own home will be just as sweet!

Need to talk about the best options for down payments? Call us at 7068605514.