Your Down Payment

Lots of borrowers can easily qualify for a mortgage loan, but they can't afford a large down payment. Here are a few ideas:

Tighten your belt and save. Look for ways to trim your monthly expenses to set aside money for a down payment. You could also decide to enroll in an automatic savings plan at your bank to automatically have a predetermined portion of your take-home pay moved into a savings account. Some effective strategies to save additional funds include moving into a residence that is less expensive, and skipping a year's vacation.

Work more and sell items you don't need. Try to find a second job. This can be rough, but the temporary trial can help you get your down payment. You can also get creative about the items you can sell. Maybe you have desirable items you can put up for sale at an auction website, or quality household goods for a garage or tag sale. Also, you can look into selling any investments you own.

Borrow your down payment from your retirement plan. Check the parameters of your particular plan. Some people get down payment money from withdrawing what they need from their IRAs or pulling funds out of their 401(k) programs. Be sure you understand the tax ramifications, repayment terms, and any penalties for withdrawing early.

Ask for help from members of your family. Many homebuyers somtimes receive help with their down payment assistance from caring family members who are prepared to help them get into their own home. Your family members may be eager to help you reach the milestone of buying your first home.

Contact housing finance agencies. These types of agencies offer provisional loan programs for moderate and low income borrowers, buyers with an interest in rehabilitating a residence in a targeted area, and additional groups as specified by each agency. With the help of this type of agency, you can get an interest rate that is below market, down payment assistance and other advantages. Housing finance agencies can assist eligible buyers with a lower rate of interest, help with your down payment, and offer other assistance. The primary purpose of not-for-profit housing finance agencies is boosting residential ownership in targeted places.

Learn about low-down and no-down mortgage loan programs.

• Federal Housing Administration (FHA) loans

  The Federal Housing Administration (FHA), a 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 mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA provides mortgage insurance to the private lenders, enabling buyers who may not qualify for a typical mortgage, to get a mortgage. Down payment amounts for FHA mortgages are below those for traditional mortgage loans, although these mortgages have current rates of interest. Closing costs can be covered by the mortgage, while the down payment could be as low as 3 percent of the purchase price.

• VA mortgage loans

  Guaranteed by the Department of Veterans Affairs, a VA loan assists service people and veterans. This particular loan does not require a down payment, has reduced closing costs, and provides a competitive interest rate. While the VA doesn't provide the loans, it does certify eligibility to qualify for a VA loan.

• Piggy-back loans

  You may finance a down payment through a second mortgage that closes along with the first. Most of the time, the piggyback loan takes care of 10 percent of the purchase amount, and the first mortgage covers 80 percent. The homebuyer pays the remaining 10%, rather than having to pull together the usual 20% down payment.

• Carry-Back loans

  In a "carry back" situation, the seller commits to loan you part of his home equity to assist you with your down payment funds. The buyer finances most of the purchase price with a traditional mortgage program and finances the remaining funds with the seller. Often, this kind of second mortgage will have higher interest.

No matter your strategy of getting together your down payment, the thrill of reaching the goal of living in your own home will be just as great!

Want to discuss the best options for down payments? Call us: 7068605514.