Your Down Payment

Many people who are looking to purchase a new house qualify for a mortgage loan, but they can't afford a large down payment. Below are a few ways to put together your down payment

Tighten your belt and save. Turn your budget inside out to discover extra money to go toward your down payment. You might also try enrolling in an automatic savings plan to have a portion of your pay automatically moved into savings. Some practical strategies to put together funds include moving into housing that is less expensive, and staying home for your family vacation this year.

Sell things you do not need and get a part-time job. Look for a second job. This can be exhausting, but the temporary difficulty can provide your down payment money. You can also seriously consider the possessions you actually need and the things you can put up for sale. A closetful of small items can add up to a fair amount at a garage or tag sale. You might also research what any investments you own could sell for.

Borrow funds from your retirement plan. Check the provisions of your retirement plan. Many homebuyers get down payment money by withdrawing from IRAs or borrowing from 401(k) programs. Be sure you comprehend the tax ramifications, repayment terms, and possible penalties for withdrawing early.

Ask for help from members of your family. Many buyers somtimes get down payment assistance from thoughtful family members who may be willing to help get them in their own home. Your family members may be pleased at the chance to help you reach the milestone of having your own home.

Contact housing finance agencies. Special mortgage loans are given to buyers in specific situations, such as low income purchasers or buyers planning to renovating homes in a targeted neighborhood, among others. With the help of a housing finance agency, you can get an interest rate that is below market, down payment help and other benefits. These kinds of agencies may assist eligible buyers with a lower interest rate, help with your down payment, and provide other benefits. The principal goal of non-profit housing finance agencies is to boost home ownership in certain parts of the city.

Explore no-down and low-down mortgage loan programs.

• FHA loans

  The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays a significant role in aiding low and moderate-income individuals get mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA offers mortgage insurance to private lenders, enabling homebuyers who will not qualify for a typical mortgage, to receive a mortgage. Interest rates with an FHA mortgage are normally the current interest rate, but the down payment with an FHA mortgage are lower than those of conventional loans. The required down payment may be as low as three percent and the closing costs can be financed in the mortgage.

• VA mortgages

  With a guarantee from the Department of Veterans Affairs, a VA loan assists service people and veterans. This particular loan does not require a down payment, has reduced closing costs, and offers a competitive interest rate. While the loans are not actually issued by the VA, the department verfifies applicants by issuing eligibility certificates.

• Piggy-back loans

  You can finance a down payment using a second mortgage that closes along with the first. Usually the first mortgage is for 80% of the purchase amount and the "piggyback" is for 10%. Rather than the traditional 20 percent down payment, the homebuyer will just have to pull together the remaining 10 percent.

• Carry-Back loans

  In a "carry back" agreement, the seller commits to loan you a portion of his home equity to help you get your down payment money. You would finance the majority of the purchase price with a traditional lender and borrow the remaining amount from the seller. Typically, this form of second mortgage will have higher interest.

No matter your strategy of putting together down payment funds, the thrill of reaching the goal of owning your own home will be just as sweet!

Need to talk about your down payment? Give us a call at 866-300-1550.