Your Down Payment

Many buyers can easily qualify for a mortgage loan, but they don't have a large sum of cash to put up a down payment. Want to buy a new house, but aren't sure how to put together your down payment?

Slash the budget and build up savings. Look for ways you can trim your expenditures to set aside money for a down payment. You might also try enrolling in an automatic savings plan at your bank to have a percentage of your payroll automatically deposited into savings. Some effective strategies to save additional funds include moving into housing that is less expensive, and skipping your vacation for a year or two.

Work a second job and sell things you don't need. Try to get a second job. This can be exhausting, but the temporary trial can provide your down payment money. You can also seriously consider the possessions you actually need and the things you can sell. Maybe you own collectibles you can sell at an online auction, or household goods for a garage or tag sale. Also, you might want to think about selling any investments you own.

Borrow money from your retirement plan. Research the details of your particular plan. You can borrow money from a 401(k) plan for you down payment or perform a withdrawal from an IRA. Be sure to learn about the tax ramifications, repayment terms, and possible early withdrawal penalties.

Ask for assistance from family members. First-time homebuyers somtimes receive down payment help from thoughtful parents and other family members who are able to help get them in their first home. Your family members may be eager to help you reach the milestone of buying your own home.

Learn about housing finance agencies. These agencies provide provisional mortgage loans to low and moderate-income homebuyers, buyers with an interest in rehabilitating a home in a particular part of the city, and other groups as defined by the finance agency. With the help of a housing finance agency, you may be given an interest rate that is below market, down payment help and other benefits. Housing finance agencies may assist you with a reduced rate of interest, help with your down payment, and offer other advantages. These non-profit programs were established to build up community in specific places.

Learn about low-down and no-down mortgage loans.

  • FHA mortgages

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in assisting low to moderate-income buyers qualify for mortgages. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA assists first-time buyers and others who might not be eligible for a typical mortgage by themselves, by offering mortgage insurance to private lenders. Interest rates for an FHA mortgage are generally the current interest rate, while the down payment amounts with an FHA loan are smaller than those of conventional loans. Closing costs might be included in the mortgage, and the down payment can be as low as 3 percent of the total.

  • VA mortgage loans

    Guaranteed by the Department of Veterans Affairs, a VA loan assists veterens and service people. This particular loan does not require a down payment, has reduced closing costs, and provides the benefit of a competitive interest rate. Even though the VA does not actually provide the loans, it does certify eligibility to apply for a VA mortgage.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes at the same time as the first. Most of the time, the first mortgage is for 80% of the cost of the home and the "piggyback" funds 10%. The borrower pays the remaining 10%, instead of needing to pull together the typical 20% down payment.

  • Carry-Back loans

    With a carry-back mortgage, the seller loans you part of his or her home equity. The buyer finances the highest percentage of the purchase price through a traditional mortgage program and borrows the remaining funds from the seller. Usually this type of second mortgage will have higher interest.

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

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

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