Your Down Payment
Lots of people who are looking to buy a new home can easily qualify for several different kinds of mortgages, but they don't have a large sum of cash to pay a down payment. Do you want to look into getting a new house, but don't know how to put together a down payment?
Slash your budget and build up savings. Look for ways to trim your expenditures to save toward a down payment. You also might enroll in an automatic savings plan at your bank to automatically have a set portion of your paycheck deposited into savings. Some effective approaches to save additional funds include moving into housing that is less expensive, and staying local for your vacation this year.
Work a second job and sell items you do not need. Perhaps you can find an additional job and build up your earnings. You can also get creative about the items you can put up for sale. Multiple small items can add up to a nice sum at a garage or tag sale. Also, you might want to consider selling any investments you hold.
Tap into your retirement funds. Investigate the parameters of your specific plan. Many people get down payment money from withdrawing from their IRAs or borrowing from their 401(k) plans. Make sure you are knowledgable about any penalties, the way this may affect on your income taxes, and repayment obligation.
Ask for help from generous members of your family. First-time buyers somtimes get help with their down payment help from giving parents and other family members who are anxious to help get them in their first home. Your family members may be inclined to help you reach the goal of having your first home.
Learn about housing finance agencies. Special mortgage programs are extended to buyers in specific circumstances, such as low income buyers or people planning to improve homes in a targeted place, among others. Working with a housing finance agency, you probably will be given an interest rate that is below market, down payment help and other benefits. These types of agencies may assist eligible buyers with a lower rate of interest, help with your down payment, and offer other assistance. These non-profit programs were established to boost home ownership in certain areas.
Learn about low-down and no-down mortgages.
- Federal Housing Administration (FHA) mortgages
The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in aiding low to 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 helps first-time homebuyers and others who may not be eligible for a traditional loan on their own, by offering mortgage insurance to the lenders.
Down payment amounts for FHA mortgages are less than those of typical mortgages, even though these mortgages hold average rates of interest. The required down payment can go as low as three percent while the closing costs can be financed in the mortgage.
- VA mortgage loans
VA loans are backed by the Department of Veterans Affairs. Veterens and service people can get a VA loan, which usually offers a competitive fixed interest rate, no down payment, and limited closing costs. While it's true that the mortgage loans don't originate from the VA, the department verfifies borrowers by issuing eligibility certificates.
- Piggy-back loans
You may finance a down payment using a second mortgage that closes at the same time as the first. Most of the time, the piggyback loan takes care of 10 percent of the home's amount, while the first mortgage covers 80 percent. The borrower covers the remaining 10%, rather than needing to put together the typical 20% down payment.
- Carry-Back loans
With a carry-back mortgage, the seller loans you part of his or her home equity. You would finance the majority of the purchase price with a traditional lender and borrow the remaining amount from the seller. Typically you will pay a somewhat higher interest rate with the loan from the seller.
No matter how you gather down payment funds, the satisfaction of living in your own home will be just as sweet!
Need to talk about your down payment? Call us: 305-967-7200.