Your Down Payment

Lots of people who would like to purchase a new house can easily qualify for various loan programs, but they don't have much to put up a down payment. Below are a few straightforward methods that will help you get together your down payment

Cut expenses and save. Scrutinize your budget to find extra money to go toward your down payment. There are bank programs through which a portion of your take-home pay is automatically transferred into savings each pay period. Some practical ways to save additional funds include moving into less expensive housing, and skipping your family vacation for a year or two.

Work more and sell things you do not need. Perhaps you can get an additional job to get your down payment money. You can also get creative about the items you can sell. You may have desirable items you can put up for sale at an auction website, or household items for a garage or tag sale. You might also research what any investments you own will sell for.

Borrow funds from your retirement plan. Investigate the parameters of your specific program. You can take out money from a 401(k) for a down payment or perform a withdrawal from an IRA. Be sure to learn about the tax consequences, repayment terms, and possible penalties for withdrawing early.

Ask for a generous gift from your family. Many buyers somtimes get help with their down payment assistance from thoughtful parents and other family members who are able to help them get into their first home. Your family members may be eager to help you reach the goal of buying your own home.

Research housing finance agencies. Special mortgate loan programs are given to homebuyers in specific circumstances, like low income buyers or future homeowners looking to improve houses in a specific place, among others. With the help of this kind of agency, you probably will be given a below market interest rate, down payment help and other benefits. These types of agencies may assist you with a lower rate of interest, help with your down payment, and provide other advantages. The central goal of not-for-profit housing finance agencies is promoting the purchase of homes in particular areas.

Explore no-down and low-down mortgage loans.

  • FHA loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a significant role in assisting low to moderate-income individuals qualify for mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers in qualifying for mortgages. FHA helps first-time buyers and others who would not be eligible for a conventional mortgage on their own, by offering mortgage insurance to the private lenders. Interest rates with an FHA loan are normally the current interest rate, while the down payment with an FHA loan are less than those of conventional loans. Closing costs can be financed within the mortgage, and your down payment may be as low as 3 percent of the total amount.

  • VA mortgages

    With a guarantee from the Department of Veterans Affairs, a VA loan is offered to veterens and service people. This special loan requires no down payment, has mimimal closing costs, and provides a competitive rate of interest. Although the VA does not actually issue the loans, it does issue a certificate of eligibility to qualify for a VA mortgage.

  • Piggy-back loans

    You can finance a down payment using a second mortgage that closes at the same time as the first. Generally the piggyback loan is for 10 percent of the home's amount, while the first mortgage finances 80 percent. The homebuyer covers the remaining 10%, instead of come up with the usual 20% down payment.

  • Carry-Back loans

    In the case of a seller "carrying back a second mortgage," the you borrow part of the seller's home equity.. You would finance the majority of the purchase price with a traditional lending institution and finance the remaining amount with the seller. Typically, this kind of second mortgage has higher interest.

The feeling of accomplishment will be the same, no matter which approach you use to get together the down payment. Your new home will be well worth it!

Need to talk about down payments? Give us a call at 214-869-7339.