Building Your Down Payment
Many borrowers qualify for various loan programs, but they can't afford a large down payment. Below are a few straightforward methods that will help you get together your down payment
Tighten your belt and save. Be on the look-out for ways to trim your monthly expenditures to put away money for a down payment. Also, you can look into bank programs in which some of your take-home pay is automatically placed into savings every pay period. Some effective strategies to save additional funds include moving into a residence that is less expensive, and skipping a year's vacation.
Sell items you do not really need and find a part-time job. Maybe you can find a second job to get your down payment money. You can also get creative about the items you could be able to put up for sale. Maybe you own desirable items you can sell at an online auction, or household goods for a garage or tag sale. Also, you can consider selling any investments you hold.
Borrow from your retirement plan. Check the parameters of your specific plan. Some homebuyers get down payment money from withdrawing from IRAs or borrowing from 401(k) programs. Be sure you are knowledgable about any penalties, the effect this may have on taxes, and repayment terms.
Ask for a gift from your family. First-time homebuyers somtimes get down payment assistance from thoughtful family members who may be eager to help them get into their first home. Your family members may be inclined to help you reach the goal of having your own home.
Research housing finance agencies. These agencies provide provisional mortgage programs for moderate and low income homebuyers, buyers interested in renovating a residence in a particular part of the city, and other certain kinds of buyers as defined by each finance agency. Financing with a housing finance agency, you can be given a below market interest rate, down payment help and other perks. Housing finance agencies can assist you with a lower rate of interest, help with your down payment, and provide other assistance. The primary purpose of non-profit housing finance agencies is boosting residential ownership in specific areas.
Research no-down and low-down mortgage loans.
- Federal Housing Administration (FHA) mortgage 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 and moderate-income families get mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get
FHA offers mortgage insurance to the private lenders, enabling buyers who might not be eligible for a traditional mortgage loan, to receive a mortgage.
Interest rates with an FHA loan are typically the current interest rate, but the down payment amounts for an FHA loan are lower than those of conventional loans. The down payment may go as low as 3 percent while the closing costs might be covered by the mortgage loan.
- VA mortgages
Guaranteed by the Department of Veterans Affairs, a VA loan assists veterens and service people. This specialized loan requires no down payment, has mimimal closing costs, and offers a competitive interest rate. Although the VA does not actually provide the loans, it does issue a certificate of eligibility to qualify for a VA loan.
- Piggy-back loans
A piggy-back loan is a second mortgage that closes along with the first. Generally the piggyback loan takes care of 10 percent of the purchase amount, and the first mortgage finances 80 percent. Rather than the traditional 20 percent down payment, the buyer will just have to cover the remaining 10 percent.
- Carry-Back loans
In a "carry back" mortgage, the seller commits to lend you some of his home equity to assist you with your down payment funds. The buyer finances the highest percentage of the purchase price through a traditional mortgage program and finances the remaining funds with the seller. Often, this type of second mortgage will have higher interest.
No matter how you gather your down payment, the satisfaction of reaching the goal of owning your own home will be just as sweet!
Need to talk about your down payment? Call us at 7068605514.