Putting Together Your Down Payment

Lots of borrowers can easily qualify for several different kinds of mortgages, but they don't have much to pay the standard down payment. Here are a few straightforward methods that will help you put together a down payment

Tighten your belt and save. Look for ways to trim your monthly expenses to put away money for a down payment. You also could enroll in an automatic savings plan at your bank to automatically have a set amount from your take-home pay transferred into savings. Some practical approaches to put together funds include moving into less expensive housing, and staying home for your vacation this year.

Sell items you don't need and get a part-time job. Look for a second job. This can be exhausting, but the temporary trial can help you get your down payment. You can also get creative about the items you can sell. A closetful of small things might 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 from a retirement plan. Investigate the provisions of your specific plan. Many people get down payment money from withdrawing what they need from their Individual Retirement Accounts or borrowing from 401(k) programs. Be sure to ask your plan representative about the tax ramifications, repayment terms, and early withdrawal penalties.

Ask for a gift from family. First-time homebuyers are often fortunate enough to receive down payment help from gracious family members who are anxious to help get them in their first home. Your family members may be inclined to help you reach the milestone of buying your own home.

Learn about housing finance agencies. Special mortgage programs are offered to buyers in certain situations, like low income buyers or homebuyers looking to renovating houses in a targeted area, among others. Working with this type of agency, you can receive an interest rate that is below market, down payment assistance and other advantages. These kinds of agencies can help eligible buyers with a lower rate of interest, help with your down payment, and offer other assistance. These non-profit agencies to boost the value of homes in particular places.

Find out about low-down and no-down mortgages.

• FHA mortgage 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 and moderate-income buyers get mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals in qualifying for home financing. FHA helps first-time buyers and others who may not be eligible for a typical mortgage on their own, by offering mortgage insurance to lenders. Down payment amounts for FHA loans are lower than those of typical mortgages, although these mortgages have average rates of interest. The required down payment can go as low as 3 percent while the closing costs might be covered by the mortgage loan.

• VA loans

  With a guarantee from the Department of Veterans Affairs, a VA loan is offered to service people and veterans. This specialized loan requires no down payment, has limited closing costs, and offers a competitive interest rate. Even though the VA doesn't actually finance the loans, it does issue a certificate of eligibility to apply for a VA loan.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes along with the first. Usually the piggyback loan is for 10 percent of the purchase amount, while the first mortgage finances 80 percent. In contrast to the traditional 20 percent down payment, the homebuyer will just have to cover the remaining 10 percent.

• Carry-Back loans

  We a seller carries 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 remainder with the seller. Often, this type of second mortgage will have a higher rate of interest.

The satisfaction will be the same, no matter how you manage to put together your down payment. Your brand new home will be your reward!

Want to discuss down payments? Give us a call: 5852820960.