Your Down Payment

Lots of people who are looking to purchase a new home can easily qualify for several different kinds of mortgages, but they don't have a lot of money to put up a down payment. Here are a few ideas:

Slash the budget and build up savings. Scrutinize the budget to discover extra money to save for your down payment. You may also decide to enroll in an automatic savings plan at your bank to have a percentage of your pay automatically moved into savings. Some effective approaches to put together funds include moving into a residence that is less expensive, and staying local for your vacation this year.

Sell things you don't really need and get a part-time job. Maybe you can get an additional job to get your down payment money. You can also seriously consider the possessions you actually need and the items you can put up for sale. You may own desirable items you can sell on an auction website, or quality household goods for a tag or garage sale. Also, you can think about selling any investments you own.

Tap into retirement funds. Check the parameters of your retirement program. You can borrow funds from a 401(k) for you down payment or withdraw from an Individual Retirement Account. You will need to ensure you know about any penalties, the way this could affect on your taxes, and repayment terms.

Ask for help from generous members of your family. First-time buyers somtimes receive help with their down payment assistance from thoughtful parents and other family members who are willing to help get them in their first home. Your family members may be happy at the chance to help you reach the goal of buying your first home.

Research housing finance agencies. Provisional mortgate loan programs are offered to homebuyers in certain situations, like low income purchasers or homebuyers looking to renovating homes in a particular area, among others. With the help of this kind of agency, you may get a below market interest rate, down payment assistance and other incentives. Housing finance agencies can assist you with a reduced interest rate, get you your down payment, and provide other assistance. These non-profit agencies exist to boost community in particular neighborhoods.

Research no-down and low-down mortgages.

• FHA mortgage loans

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in assisting low and moderate-income individuals qualify for mortgages. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA assists first-time homebuyers and others who would not be able to qualify for a typical loan on their own, by providing mortgage insurance to lenders. Down payment totals for FHA loans are smaller than those for traditional mortgages, even though these mortgages hold average rates of interest. The down payment can go as low as 3 percent while the closing costs can be covered by the mortgage.

• VA loans

  Guaranteed by the Department of Veterans Affairs, a VA loan is offered to service people and veterans. This special loan does not require a down payment, has limited closing costs, and provides the benefit of a competitive interest rate. While the VA does not actually issue the loans, it does issue a certificate of eligibility to qualify for a VA mortgage.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes at the same time as the first. Most of the time, the first mortgage is for 80% of the cost of the home and the "piggyback" is for 10%. Rather than the traditional 20 percent down payment, the buyer will just have to pull together 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. The buyer finances the majority of the purchase price through a traditional mortgage program and finances the remaining funds with the seller. Typically, this type of second mortgage has higher interest.

No matter your method of pulling together your down payment, 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: 305-967-7200.