Your Down Payment

Lots of folks who are looking to purchase a new house can easily qualify for several different kinds of mortgages, but they don't have a lot of money to put up a down payment. Want to look into getting a new house, but don't know how you should get together a down payment?

Reduce expenses and save. Turn your budget upside-down to discover ways you can cut expenses to save for your down payment. You could also try enrolling in an automatic savings plan to automatically have a specific amount from your take-home pay moved into a savings account. You would be wise to look into some big expenses in your budget that you can give up, or trim, at least temporarily. For example, you may decide to move into less expensive housing, or skip a family vacation.

Sell things you don't really need and get a second job. Look for an additional job. This can be rough, but the temporary trial can provide your down payment money. Additionally, 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. Multiple small things could add up to a fair amount at a garage or tag sale. Also, you might want to think about selling any investments you own.

Borrow funds from your retirement plan. Investigate the parameters of your particular program. Some people get down payment money by withdrawing funds from Individual Retirement Accounts or taking funds out of 401(k) programs. Make sure you comprehend the tax consequences, your obligation for repayment, and any penalties for withdrawing early.

Ask for a generous gift from family. Many buyers are often lucky enough to get down payment help from thoughtful family members who are prepared to help them get into their first home. Your family members may be happy at the chance to help you reach the goal of owning your first home.

Contact housing finance agencies. These agencies extend special mortgage programs to moderate and low income homebuyers, buyers interested in rehabilitating a residence within a specific area, and other particular kinds of buyers as specified by each agency. With the help of this kind of agency, you can be given an interest rate that is below market, down payment help and other benefits. Housing finance agencies can assist you with a lower rate of interest, help with your down payment, and offer other benefits. The main goal of non-profit housing finance agencies is boosting residence ownership in particular parts of the city.

Research no-down and low-down mortgage loan programs.

  • Federal Housing Administration (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 helping low and moderate-income families qualify for mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA offers mortgage insurance to private lenders, ensuring the buyers are eligible for a mortgage loan. Down payment sums for FHA loans are below those of conventional mortgage loans, even though these loans hold average rates of interest. Closing costs may be covered by the mortgage, while the down payment might be as low as 3 percent of the total amount.

  • VA mortgages

    With a guarantee from the Department of Veterans Affairs, a VA loan qualifies veterens and service people. This special loan does not require a down payment, has mimimal closing costs, and provides a competitive interest rate. While the VA does not actually finance the loans, it does certify eligibility to qualify for a VA mortgage.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that you close with the first. Most of the time, the piggyback loan takes care of 10 percent of the purchase price, while the first mortgage finances 80 percent. The homebuyer covers the remaining 10%, rather than putting the usual 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.. You would borrow the majority of the purchase price from a traditional mortgage lender and finance the remainder with the seller. Usually you'll pay a slightly higher interest rate on the loan from the seller.

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

Want to discuss down payments? Call us: 214-869-7339.