Your Down Payment

Lots of buyers can easily qualify for various loan programs, but they don't have a large sum of cash to pay the standard down payment. Want to buy a new home, but don't know how you should get together your down payment?

Slash the budget and build up savings. Scrutinize the budget to discover ways you can cut expenses to save for your down payment. Also, you can look into bank programs through which a portion of your take-home pay is automatically transferred into savings every pay period. Some practical ways to save additional funds include moving into less expensive housing, and staying local for your vacation this year.

Work more and sell items you don't need. Try to get an additional job. This can be exhausting, but the temporary trial can help you get your down payment. In addition, you can make an exhaustive list of items you may be able to sell. Broken gold jewelry can bring a good amount from local jewelry stores. Maybe you own collectibles you can put up for sale on an auction website, or quality household items for a garage or tag sale. You can also look into what your investments may sell for.

Tap into your retirement funds. Check the provisions of your retirement program. Many people get down payment money from withdrawing funds from IRAs or taking money out of 401(k) programs. Be sure you comprehend the tax consequences, your obligation for repaying funds, and any early withdrawal penalties.

Ask for assistance from members of your family. First-time buyers are sometimes fortunate enough to receive down payment assistance from caring family members who are prepared to help them get into their first home. Your family members may be eager to help you reach the milestone of having your first home.

Contact housing finance agencies. Provisional mortgage programs are extended to buyers in certain situations, such as low income buyers or buyers looking to remodel homes in a certain area, among others. Working through this type of agency, you may be given a below market interest rate, down payment help and other benefits. Housing finance agencies can assist you with a reduced rate of interest, help with your down payment, and offer other advantages. The primary goal of non-profit housing finance agencies is promoting the purchase of homes in specific parts of the city.

Research no-down and low-down mortgages.

  • Federal Housing Administration (FHA) mortgages

    The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays a critical role in aiding low and moderate-income buyers qualify for mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA assists first-time buyers and others who would not be eligible for a typical mortgage by themselves, by offering mortgage insurance to the lenders. Interest rates with an FHA loan generally feature the current interest rate, while the down payment requirements with an FHA mortgage are lower than those of conventional loans. Closing costs may be included in the mortgage, and your down payment might be as low as 3 percent of the total amount.

  • VA loans

    With a guarantee from the Department of Veterans Affairs, a VA loan is offered to veterens and service people. This special loan does not require a down payment, has limited closing costs, and provides the benefit of a competitive rate of interest. While the mortgages don't originate from the VA, the office verfifies applicants by providing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes with the first. Usually the piggyback loan is for 10 percent of the purchase amount, and the first mortgage covers 80 percent. The homebuyer covers the remaining 10%, instead of needing to pull together the typical 20% down payment.

  • Carry-Back loans

    In a "carry back" mortgage, the seller agrees to loan you a portion of his home equity to help you get your down payment funds. The buyer finances most of the purchase price with a traditional mortgage program and borrows the remaining funds from the seller. Often, this form of second mortgage has higher interest.

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

Want to discuss down payment options? Give us a call at 877-310-6200.

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