Your Down Payment

Lots of buyers can easily qualify for various loan programs, but they can't afford a large down payment. We have a few suggestions

Slash the budget and build up savings. Turn your budget upside-down to find extra money to save for your down payment. There are bank programs through which a portion of your paycheck is automatically transferred into savings every pay period. You might look into some big expenses in your spending history that you can give up, or trim, at least temporarily. For example, you might decide to move into less expensive housing, or stay close to home for your family vacation.

Sell items you do not really need and find a part-time job. Maybe you can find a second job and build up your earnings. Additionally, you can put together a comprehensive list of items you may be able to sell. Broken gold jewelry can be sold at local jewelers. You might have desirable items you can sell at an auction website, or household goods for a garage or tag sale. You might also explore what your investments may sell for.

Borrow your down payment from a retirement plan. Explore the specifics for your particular plan. Some homebuyers get down payment money by withdrawing funds from their IRAs or borrowing from 401(k) plans. Make sure to ask your plan representative about the tax consequences, repayment terms, and penalties for withdrawing early.

Ask for a generous gift from your family. First-time homebuyers are sometimes lucky enough to receive help with their down payment help from caring family members who are willing to help them get into their first home. Your family members may be willing to help you reach the milestone of buying your own home.

Learn about housing finance agencies. Provisional mortgage programs are extended to buyers in certain situations, like low income purchasers or buyers planning to improve houses in a specific place, among others. Working through a housing finance agency, you probably will get an interest rate that is below market, down payment help and other benefits. These types of agencies can assist eligible buyers with a lower interest rate, help with your down payment, and offer other assistance. The main purpose of non-profit housing finance agencies is to boost home ownership in particular areas.

Learn about low-down and no-down mortgage loans.

• Federal Housing Administration (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 assisting low and moderate-income families get mortgages. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids homebuyers who need to get home financing. FHA aids first-time buyers and others who would not be able to qualify for a conventional loan by themselves, by providing mortgage insurance to lenders. Interest rates for an FHA loan normally feature the current interest rate, while the down payment amounts for an FHA loan will be lower than those of conventional loans. The required down payment may be as low as 3 percent while the closing costs could be financed in the mortgage loan.

• VA mortgages

  VA loans are guaranteed by the Department of Veterans Affairs. Service persons and veterans can receive a VA loan, which usually offers a competitive rate of interest, no down payment, and minimal closing costs. Even though the mortgage loans are not actually issued by the VA, the office certifies applicants by issuing eligibility certificates.

• Piggy-back loans

  A piggy-back loan is a second mortgage that you close with the first. Generally the piggyback loan takes care of 10 percent of the home's price, and the first mortgage finances 80 percent. Rather than the traditional 20 percent down payment, the homebuyer will just have to pull together the remaining 10 percent.

• Carry-Back loans

  With a carry-back mortgage, the you borrow a portion of the seller's home equity.. In this scenario, you would finance the largest portion of the purchase price with a traditional lending institution and borrow the remaining amount from the seller. Usually this type of second mortgage will have a higher rate of interest.

The satisfaction will be the same, no matter which approach you use to come up with the down payment. Your brand new home will be your reward!

Need to talk about down payment options? Give us a call at 305-967-7200.