Your Down Payment

Many borrowers can qualify for several different kinds of mortgages, but they can't afford a large down payment. Want to buy a new house, but aren't sure how you should put together your down payment?

Slash the budget and build up savings. Be on the look-out for ways you can trim your expenses to put away money for a down payment. Also, you can look into bank programs through which a portion of your take-home pay is automatically transferred into savings every pay period. Some practical strategies to put together funds include moving into less expensive housing, and skipping a year's vacation.

Sell items you don't really need and get a part-time job. Maybe you can find an additional job to get your down payment money. Additionally, you can make an exhaustive list of things you may be able to sell. Unworn gold jewelry can bring a good price from local jewelers. You might have desirable items you can put up for sale at an auction website, or quality household items for a tag or garage sale. You could also look into what your investments may bring if sold.

Borrow from retirement funds. Explore the details for your individual plan. Many homebuyers get down payment money by withdrawing funds from Individual Retirement Accounts or getting funds out of 401(k) programs. Be sure you know about any penalties, the way this may affect on income taxes, and repayment obligation.

Ask for assistance from generous members of your family. Many homebuyers are often fortunate enough to receive help with their down payment assistance from gracious family members who may be able to help get them in their own home. Your family members may be pleased to help you reach the milestone of buying your own home.

Contact housing finance agencies. These types of agencies extend provisional mortgage loans to low and moderate-income buyers, buyers with an interest in rehabilitating a home within a particular area, and other groups as defined by the finance agency. With the help of a housing finance agency, you probably will be given an interest rate that is below market, down payment help and other incentives. Housing finance agencies may help eligible buyers with a reduced rate of interest, help with your down payment, and offer other assistance. These non-profit programs to boost community in specific places.

Learn about low-down and no-down mortgages.

  • Federal Housing Administration (FHA) mortgages

    The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays a critical role in aiding low to moderate-income individuals qualify for mortgage loans. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals in qualifying for mortgage loans. FHA aids first-time homebuyers and others who might not be eligible for a conventional mortgage by themselves, by providing mortgage insurance to lenders. Down payment totals for FHA mortgages are below those for conventional mortgage loans, even though these loans have average rates of interest. Closing costs may be included in the mortgage, and the down payment can be as low as 3% of the total amount.

  • VA mortgages

    With a guarantee from the Department of Veterans Affairs, a VA loan assists veterens and service people. This special loan does not require a down payment, has limited closing costs, and provides a competitive interest rate. While the mortgages are not actually provided by the VA, the office certifies borrowers by issuing eligibility certificates.

  • Piggy-back loans

    You can finance your down payment through a second mortgage that closes with the first. Generally the first mortgage is for 80% of the cost of the home and the "piggyback" funds 10%. Rather than the usual 20 percent down payment, the homebuyer just has to cover the remaining 10 percent.

  • Carry-Back loans

    With a carry-back mortgage, the you borrow a portion of the seller's home equity.. The buyer finances most of the purchase price with a traditional mortgage program and borrows the remaining funds from the seller. Often, this kind of second mortgage will have higher interest.

No matter your strategy of pulling together down payment money, the satisfaction of living in your own home will be just as great!

Want to discuss down payment options? Call us at 720-598-8300.

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