Your Down Payment
Many buyers qualify for a mortgage loan, but they can't afford a large down payment. Below are a few straightforward ways to put together a down payment
Tighten your belt and save. Look for ways to reduce your expenses to put away money for a down payment. You may also decide to enroll in an automatic savings plan to automatically have a set amount from your take-home pay transferred into a savings account. Some practical strategies to put together funds include moving into housing that is less expensive, and staying local for your family vacation for a year or two.
Sell items you don't need and find a second job. Perhaps you can get an additional job and save your earnings. You can also get creative about the things you can put up for sale. You might own collectibles you can sell at an online auction, or quality household goods for a tag or garage sale. Also, you might want to think about selling any investments you own.
Borrow from your retirement funds. Check the provisions of your particular plan. You can pull out funds from a 401(k) plan for a down payment or make a withdrawal from an Individual Retirement Account. Make sure to learn about the tax ramifications, repayment terms, and penalties for withdrawing early.
Ask for a gift from family. Many homebuyers somtimes receive help with their down payment help from caring family members who may be able to help them get into their own home. Your family members may be happy at the chance to help you reach the goal of having your first home.
Research housing finance agencies. Special mortgate loan programs are provided to buyers in specific circumstances, such as low income homebuyers or future homeowners looking to renovating houses in a particular neighborhood, among others. Financing with this type of agency, you can get an interest rate that is below market, down payment assistance and other incentives. Housing finance agencies can assist eligible homebuyers with a reduced interest rate, get you your down payment, and offer other benefits. These non-profit programs to promote community in specific neighborhoods.
Find out about low-down and no-down mortgage loan programs.
- Federal Housing Administration (FHA) loans
The Federal Housing Administration (FHA), which is inside the U.S. Department of Housing and Urban Development (HUD), plays an important part in assisting low to moderate-income buyers get mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get
FHA provides mortgage insurance to private lenders, enabling buyers who might not be eligible for a conventional mortgage, to get financing.
Down payment amounts for FHA mortgages are lower than those for conventional mortgage loans, although these loans have current rates of interest. The required down payment may be as low as 3 percent while the closing costs could be included in the mortgage loan.
- VA mortgages
With a guarantee from the Department of Veterans Affairs, a VA loan qualifies veterens and service people. This specialized loan requires no down payment, has reduced closing costs, and offers a competitive rate of interest. Even though the VA does not actually issue the loans, it does certify eligibility to qualify for a VA mortgage.
- Piggy-back loans
A piggy-back loan is a second mortgage that closes with the first. Generally the piggyback loan is for 10 percent of the home's amount, while the first mortgage finances 80 percent. In contrast to the usual 20 percent down payment, the homebuyer will just have to pull together the remaining 10 percent.
- Carry-Back loans
We a seller carries back a second mortgage, the seller loans you part of his or her equity. The buyer funds most of the purchase price through a traditional mortgage program and borrows the remainder from the seller. Typically you'll pay a somewhat higher interest rate with the loan from the seller.
No matter how you gather your down payment money, the thrill of reaching the goal of living in your own home will be just as great!
Need to talk about down payments? Call us at 214-869-7339.