Your Down Payment
Lots of buyers can qualify for various loan programs, but they can't afford a large down payment. We have a few suggestions
Tighten your belt and save. Turn your budget inside out to discover extra money to go toward your down payment. Also, you can look into bank programs in which a specific portion of your take-home pay is automatically transferred into a savings account every pay period. Some effective ways to build up funds include moving into less expensive housing, and staying home for your family vacation this year.
Sell things you don't need and get a part-time job. Look for an additional job. This can be exhausting, but the temporary difficulty can provide your down payment money. You can also get serious about the possessions you actually need and the items you can put up for sale. A closetful of small items can add up to a fair amount at a garage or tag sale. Also, you can think about selling any investments you hold.
Borrow from your retirement plan. Research the specifics of your individual plan. Many homebuyers get down payment money from withdrawing funds from IRAs or borrowing from their 401(k) programs. Be sure you understand about any penalties, the effect this may have on taxes, and repayment obligation.
Ask for a generous gift from your family. Many buyers are often fortunate enough to receive down payment assistance from giving parents and other family members who may be anxious to help get them in their own home. Your family members may be eager to help you reach the milestone of having your own home.
Research housing finance agencies. These agencies offer special mortgage programs for low and moderate-income borrowers, buyers interested in rehabilitating a house in a particular area, and other specific kinds of buyers as specified by each finance agency. Working with a housing finance agency, you can receive an interest rate that is below market, down payment help and other incentives. Housing finance agencies may help eligible homebuyers with a reduced interest rate, help with your down payment, and offer other advantages. The primary purpose of non-profit housing finance agencies is to promote the purchase of homes in specific places.
Explore no-down and low-down mortgage loans.
- FHA mortgages
The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in assisting low and moderate-income individuals qualify for mortgages. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals who need to get mortgages.
FHA aids first-time buyers and others who may not be eligible for a traditional loan by themselves, by offering mortgage insurance to private lenders.
Interest rates for an FHA loan are usually the current interest rate, but the down payment requirements for an FHA loan are below those of conventional loans. Closing costs may be covered by the mortgage, and the down payment could be as low as 3% of the total amount.
- VA loans
VA loans are guaranteed by the U.S. Department of Veterans Affairs. Veterens and service people can receive a VA loan, which usually offers a reasonable fixed interest rate, no down payment, and minimal closing costs. While the VA doesn't 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 you close at the same time as the first. Most of the time, the first mortgage is for 80% of the purchase price and the "piggyback" is for 10%. Rather than the traditional 20 percent down payment, the homebuyer just has to pull together the remaining 10 percent.
- Carry-Back loans
In a "carry back" situation, the seller agrees to lend you a portion of his home equity to assist you with your down payment money. You would finance the largest portion of the purchase price with a traditional mortgage lender and finance the remaining amount with the seller. Typically, this kind of second mortgage will have a higher rate of interest.
No matter your strategy of pulling together your down payment money, the satisfaction of reaching the goal of living in your own home will be just as sweet!
Need to talk about down payment options? Give us a call: 7068605514.