Building Your Down Payment

Many folks who are looking to purchase a new home can qualify for a loan, but they can't afford a large down payment. Below are a few ways to get together a down payment

Tighten your belt and save. Scrutinize the budget to discover extra money to go toward your down payment. You could also decide to enroll in an automatic savings plan at your bank to have a percentage of your payroll automatically moved into savings. Some effective methods to save additional funds include moving into less expensive housing, and staying local for your family vacation for a year or two.

Work more and sell things you do not need. Perhaps you can find a second job and save your earnings. Additionally, you can put together an exhaustive inventory of things you may be able to sell. Unworn gold jewelry can bring a good price from local jewelers. You may own collectibles you can put up for sale on an online auction, or quality household items for a tag or garage sale. You might also explore what your investments will bring if sold.

Borrow from your retirement funds. Check the provisions of your retirement plan. It is possible to take out funds from a 401(k) plan for you down payment or withdraw from an Individual Retirement Account. Make sure you understand about any penalties, the way this will affect on your taxes, and repayment obligation.

Ask for help from generous members of your family. First-time homebuyers somtimes receive down payment help from caring family members who are anxious to help get them in their own home. Your family members may be eager to help you reach the goal of buying your first home.

Contact housing finance agencies. These agencies provide special loan programs to low and moderate-income borrowers, buyers interested in renovating a home in a targeted area, and other groups as specified by each agency. Working through a housing finance agency, you probably will receive an interest rate that is below market, down payment assistance and other perks. These types of agencies may help you with a lower rate of interest, get you your down payment, and offer other benefits. The main mission of non-profit housing finance agencies is promoting the purchase of homes in specific places.

Find out about low-down and no-down mortgages.

  • FHA loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a vital part in helping low to moderate-income families get mortgage loans. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals in getting mortgage loans. FHA aids first-time buyers and others who would not be eligible for a conventional loan on their own, by offering mortgage insurance to the private lenders. Down payment sums for FHA mortgages are lower than those of conventional mortgages, even though these mortgages come with average rates of interest. Closing costs can be included in the mortgage, while the down payment may be as low as 3 percent of the total amount.

  • VA mortgages

    VA loans are guaranteed by the U.S. Department of Veterans Affairs. Veterens and service people can get a VA loan, which typically offers a reasonable interest rate, no down payment, and limited closing costs. Although the mortgage loans aren't actually financed by the VA, the office verfifies borrowers by issuing eligibility certificates.

  • Piggy-back loans

    You may finance a down payment with a second mortgage that closes with the first. In most cases the first mortgage covers 80% of the purchase price and the "piggyback" funds 10%. Instead of the traditional 20 percent down payment, the buyer just has to cover the remaining 10 percent.

  • Carry-Back loans

    In a "carry back" agreement, the seller commits to lend you some of his home equity to help you get your down payment money. The buyer finances the majority of the purchase price with a traditional mortgage program and borrows the remainder from the seller. Usually this kind of second mortgage will have a higher rate of interest.

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

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

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Augusta Mortgage Solutions

NMLS#:148529 GA Residential Mortgage Licensee #18861

141 North Belair Road Suite 102 NMLS# 149807
Evans, GA 30809-7431