Your Down Payment

Lots of buyers can qualify for various loan programs, but they can't afford a large down payment. Want to look into getting a new home, but aren't sure how you should put together a down payment?

Slash your budget and build up savings. Look for ways you can reduce your monthly expenditures to put away money for a down payment. There are bank programs through which a specific portion of your take-home pay is automatically transferred into savings every pay period. You would be wise to look into some big expenses in your budget that you can live without, or reduce, at least temporarily. For example, you might decide to move into less expensive housing, or skip a family vacation.

Work a second job and sell things you do not need. Maybe you can find an additional job to get your down payment money. You can also get creative about the items you can sell. Multiple small items may add up to a fair amount at a garage or tag sale. You could also look into what your investments may bring if sold.

Borrow from retirement funds. Investigate the parameters of your specific program. Some people get down payment money by withdrawing funds from IRAs or borrowing from their 401(k) programs. You will need to make sure you know about any penalties, the effect this could have on income taxes, and repayment terms.

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

Contact housing finance agencies. These agencies offer provisional mortgage loans for moderate and low income borrowers, buyers with an interest in remodeling a residence within a specific area, and other groups as specified by each finance agency. With the help of a housing finance agency, you can get an interest rate that is below market, down payment assistance and other perks. Housing finance agencies may assist eligible homebuyers with a lower rate of interest, help with your down payment, and offer other benefits. The primary purpose of non-profit housing finance agencies is to boost residential ownership in certain areas.

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

• Federal Housing Administration (FHA) mortgage loans

  The Federal Housing Administration (FHA), which is inside the U.S. Department of Housing and Urban Development (HUD), plays an important part in aiding low and moderate-income Americans get mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers in getting mortgage loans. FHA aids first-time homebuyers and others who might not be able to qualify for a traditional mortgage by themselves, by offering mortgage insurance to the lenders. Down payment amounts for FHA loans are lower than those for conventional mortgage loans, although these mortgages come with current interest rates. Closing costs can be covered by the mortgage, and the down payment can be as low as 3 percent of the purchase price.

• VA mortgages

  VA loans are backed by the Department of Veterans Affairs. Veterens and service people are eligible for a VA loan, which typically offers a reasonable fixed rate of interest, no down payment, and reduced closing costs. Even though the VA does not finance the mortgages, it does issue a certificate of eligibility to qualify for a VA mortgage.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes along with the first. Usually the piggyback loan takes care of 10 percent of the purchase price, and the first mortgage covers 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 a portion of the seller's home equity.. In this scenario, you would finance the largest portion of the purchase price with a traditional lender and finance the remainder with the seller. Usually you will pay a slightly higher rate with the loan from the seller.

No matter how you gather down payment funds, the thrill of living in your own home will be just as great!

Need to talk about down payment options? Call us: 5852820960.