Your Down Payment

Many folks who would like to purchase a new home can qualify for several different kinds of mortgages, but they can't afford a large down payment. Do you want to buy a new house, but don't know how to put together a down payment?

Slash your budget and build up savings. Look for ways you can trim your expenditures to set aside money for a down payment. There are bank programs in which a specific portion of your take-home pay is automatically transferred into a savings account each pay period. You might look into some big expenses in your spending history that you can give up, or reduce, at least temporarily. Here are a couple of examples: you may decide to move into less expensive housing, or skip a vacation.

Work a second job and sell things you do not need. Look for a second job. This can be exhausting, but the temporary trial can provide your down payment money. You can also get creative about the items you may be able to put up for sale. A closetful of small things can add up to a fair amount at a garage or tag sale. You can also look into what any investments you have may bring if sold.

Tap into your retirement funds. Investigate the provisions of your specific program. It is possible to borrow money from a 401(k) for a down payment or withdraw from an IRA. Be sure you comprehend the tax ramifications, your obligation for repayment, and possible penalties for withdrawing early.

Ask for help from generous family members. First-time buyers are sometimes fortunate enough to get help with their down payment assistance from thoughtful parents and other family members who may be willing to help them get into their first home. Your family members may be willing to help you reach the milestone of owning your first home.

Research housing finance agencies. These types of agencies offer provisional mortgate loan programs to low and moderate-income buyers, buyers with an interest in rehabilitating a house in a targeted part of the city, and other groups as defined by the agency. With the help of a housing finance agency, you can be given an interest rate that is below market, down payment help and other perks. Housing finance agencies can assist you with a lower interest rate, get you your down payment, and offer other benefits. These non-profit agencies to promote community in certain areas.

Explore no-down and low-down mortgages.

• Federal Housing Administration (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 part in assisting low to moderate-income individuals get mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids homebuyers who wish to get mortgages. FHA assists first-time buyers and others who may not be able to qualify for a traditional mortgage loan on their own, by offering mortgage insurance to lenders. Down payment amounts for FHA loans are smaller than those for traditional mortgage loans, although these loans hold current interest rates. Closing costs might be included in the mortgage, and your down payment could be as low as 3 percent of the total amount.

• VA loans

  With a guarantee from the Department of Veterans Affairs, a VA loan is offered to veterens and service people. This special loan does not require a down payment, has reduced closing costs, and offers a competitive interest rate. Even though the VA doesn't actually finance the mortgage loans, it does issue a certificate of eligibility to apply for a VA mortgage.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes at the same time as the first. Usually the piggyback loan takes care of 10 percent of the home's amount, and the first mortgage finances 80 percent. Instead of the traditional 20 percent down payment, the buyer just has to cover the remaining 10 percent.

• Carry-Back loans

  In the option of a seller "carrying back a second mortgage," the seller loans you part of his or her home equity. In this scenario, you would finance the majority of the purchase price with a traditional lending institution and borrow the remaining amount from the seller. Often, this kind of second mortgage has higher interest.

No matter your strategy of putting together your down payment money, the thrill of reaching the goal of owning your own home will be just as sweet!

Need to talk about the best options for down payments? Give us a call at 7068605514.