Your Down Payment
Many borrowers can qualify for several different kinds of mortgages, but they don't have much to pay the standard down payment. Do you want to buy a new home, but don't know how you should get together a down payment?
Slash the budget and build up savings. Look for ways to reduce your monthly expenses to save toward a down payment. Also, you can look into bank programs in which some of your paycheck is automatically deposited into a savings account every pay period. Some effective methods to build up funds include moving into less expensive housing, and skipping a year's vacation.
Sell things you don't need and get a part-time job. Try to find an additional job. This can be rough, but the temporary difficulty can provide your down payment money. Additionally, you can put together an exhaustive list of things you can sell. Unworn gold jewelry can be sold at local jewelers. Multiple small items may add up to a fair amount at a garage or tag sale. Also, you might want to look into selling any investments you own.
Borrow from your retirement plan. Check the parameters of your retirement plan. It is possible to pull out money from a 401(k) plan for a down payment or withdraw from an IRA. You will need to be sure you understand about any penalties, the way this could affect on taxes, and repayment terms.
Ask for a generous gift from 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 own home. Your family members may be inclined to help you reach the milestone of owning your first home.
Research housing finance agencies. Special mortgage programs are extended to homebuyers in certain circumstances, such as low income purchasers or future homeowners planning to renovating houses in a targeted area, among others. With the help of this type of agency, you may be given a below market interest rate, down payment assistance and other incentives. These kinds of agencies may help you with a lower rate of interest, help with your down payment, and provide other assistance. These non-profit agencies exist to promote home ownership in particular areas.
Research no-down and low-down mortgage loans.
- FHA mortgages
The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a vital role in aiding low to moderate-income buyers qualify for mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals who need to get mortgages.
FHA aids first-time buyers and others who may not be able to qualify for a traditional loan on their own, by providing mortgage insurance to the private lenders.
Interest rates for an FHA mortgage generally feature the current interest rate, but the down payment amounts for an FHA mortgage will be below those of conventional loans. Closing costs can be included in the mortgage, while your down payment may be as low as 3% of the total.
- VA loans
With a guarantee from the Department of Veterans Affairs, a VA loan assists service people and veterans. This specialized loan requires no down payment, has mimimal closing costs, and provides the advantage of a competitive interest rate. While the mortgages aren't actually financed by the VA, the office verfifies applicants by providing eligibility certificates.
- Piggy-back loans
A piggy-back loan is a second mortgage that you close at the same time as the first. Usually the piggyback loan is for 10 percent of the home's price, while the first mortgage finances 80 percent. The borrower covers the remaining 10%, rather than needing to put together the typical 20% down payment.
- Carry-Back loans
In the option of a seller "carrying back a second mortgage," the you borrow part of the seller's home equity.. The buyer finances the highest percentage of the purchase price through a traditional mortgage program and finances the remaining funds with the seller. Usually you will pay a slightly higher rate with the loan from the seller.
No matter your method of pulling together your down payment, the thrill of living in your own home will be just as great!
Need to talk about the best options for down payments? Give us a call at 877-310-6200.