Your Down Payment

Many buyers can qualify for several different kinds of mortgages, but they don't have a lot of money to pay the standard down payment. Here are a few methods that will help you get together a down payment

Tighten your belt and save. Turn your budget inside out to uncover extra money to go toward your down payment. There are bank programs through which some of your paycheck is automatically placed into a savings account every pay period. You might look into some big expenses in your spending history that you can do without, or reduce, at least temporarily. For example, you may decide to move into less expensive housing, or skip a family vacation.

Work more and sell things you do not need. Maybe you can get an additional job and build up your earnings. Additionally, you can put together a comprehensive list of items you may be able to sell. Unused gold jewelry can be sold at local jewelry stores. A closetful of small things may add up to a fair amount at a garage or tag sale. You can also research what any investments you have will sell for.

Borrow from a retirement plan. Check the parameters of your retirement plan. You can pull out funds from a 401(k) plan for you down payment or withdraw from an Individual Retirement Account. Be sure to find out about the tax consequences, repayment terms, and early withdrawal penalties.

Ask for assistance from generous family members. Many homebuyers are sometimes lucky enough to get down payment help from caring parents and other family members who are able to help them get into their first home. Your family members may be pleased to help you reach the milestone of having your first home.

Contact housing finance agencies. Provisional loan programs are offered to buyers in certain situations, such as low income buyers or homebuyers looking to improve houses in a particular part of town, among others. Working with a housing finance agency, you probably will receive an interest rate that is below market, down payment help and other incentives. Housing finance agencies may assist eligible homebuyers with a reduced rate of interest, help with your down payment, and provide other benefits. The primary goal of non-profit housing finance agencies is promoting residential ownership in specific parts of the city.

Research no-down and low-down mortgages.

• Federal Housing Administration (FHA) loans

  The Federal Housing Administration (FHA), which is inside the U.S. Department of Housing and Urban Development (HUD), plays a critical part in aiding low and moderate-income buyers 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 homebuyers and others who might not be able to qualify for a traditional mortgage loan by themselves, by offering mortgage insurance to the lenders. Interest rates with an FHA mortgage are usually the current interest rate, while the down payment for an FHA mortgage are smaller than those of conventional loans. The down payment may be as low as three percent and the closing costs may be packaged in the mortgage.

• VA mortgage loans

  Guaranteed by the Department of Veterans Affairs, a VA loan assists veterens and service people. This special loan requires no down payment, has limited closing costs, and provides a competitive rate of interest. Even though the loans aren't actually financed by the VA, the department verfifies applicants by issuing eligibility certificates.

• Piggy-back loans

  A piggy-back loan is a second mortgage that you close at the same time as the first. Generally the piggyback loan takes care of 10 percent of the purchase amount, while the first mortgage finances 80 percent. Rather than the traditional 20 percent down payment, the buyer just has to pull together the remaining 10 percent.

• Carry-Back loans

  In a "carry back" agreement, the seller commits to lend you some of his own equity to help you with your down payment funds. The buyer finances most of the purchase price through a traditional mortgage program and finances the remaining funds with the seller. Generally, this type of second mortgage has higher interest.

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

Want to discuss your down payment? Call us: 7068605514.