Your Down Payment
Many buyers can qualify for various loan programs, but they can't afford a large down payment. Do you want to buy a new home, but don't know how to get together your down payment?
Slash the budget and build up savings. Turn your budget upside-down to uncover ways you can cut expenses to go toward your down payment. You could also try enrolling in an automatic savings plan at your bank to automatically have a specific portion of your paycheck deposited into savings. Some effective methods to build up funds include moving into housing that is less expensive, and skipping a year's vacation.
Work a second job and sell things you do not need. Try to find a second job. This can be exhausting, but the temporary trial can provide your down payment money. In addition, you can make an exhaustive list of things you can sell. Unworn gold jewelry can be sold at local jewelry stores. Maybe you have desirable items you can put up for sale on an online auction, or quality household goods for a tag or garage sale. Also, you can think about selling any investments you own.
Borrow money from your retirement plan. Investigate the provisions of your specific plan. Many homebuyers get down payment money by withdrawing what they need from Individual Retirement Accounts or borrowing from 401(k) programs. You will want to be sure you are knowledgable about any penalties, the way this could affect on income taxes, and repayment obligation.
Request a generous gift from your family. Many homebuyers somtimes receive down payment assistance from thoughtful family members who may be prepared to help them get into their first home. Your family members may be pleased to help you reach the milestone of owning your own home.
Learn about housing finance agencies. Special mortgage programs are given to homebuyers in specific situations, like low income purchasers or homebuyers looking to remodel houses in a specific neighborhood, among others. Working through a housing finance agency, you may get an interest rate that is below market, down payment help and other perks. Housing finance agencies can assist you with a reduced rate of interest, get you your down payment, and provide other advantages. The primary purpose of not-for-profit housing finance agencies is build up home ownership in specific areas.
Find out about low-down and no-down mortgage loan programs.
- FHA loans
The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in aiding low to moderate-income individuals qualify for mortgages. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get
FHA provides mortgage insurance to the private lenders, enabling buyers who will not qualify for a typical mortgage loan, to obtain home financing.
Down payment requirements for FHA loans are less than those of traditional mortgage loans, although these mortgages have average rates of interest. The down payment can go as low as three percent and the closing costs could be included in the mortgage.
- VA mortgage loans
VA loans are guaranteed by the Department of Veterans Affairs. Service persons and veterans can benefit from a VA loan, which generally offers a low rate of interest, no down payment, and limited closing costs. While the mortgages are not actually financed by the VA, the office verfifies borrowers by issuing eligibility certificates.
- Piggy-back loans
A piggy-back loan is a second mortgage that closes with the first. Usually the piggyback loan takes care of 10 percent of the purchase amount, and the first mortgage finances 80 percent. Instead of the usual 20 percent down payment, the homebuyer just has to pull together the remaining 10 percent.
- Carry-Back loans
With a carry-back mortgage, the you borrow part of the seller's home equity.. You would finance the majority of the purchase price with a traditional lender and borrow the remainder from the seller. Usually you will pay a slightly higher interest rate on the loan from the seller.
The feeling of accomplishment will be the same, no matter how you manage to pull together the down payment. Your new home will be your reward!
Want to discuss down payments? Give us a call: 214-869-7339.