Your Down Payment

Lots of folks who would like to purchase a new house can easily qualify for a mortgage loan, but they don't have a lot of money to pay the standard down payment. Want to look into getting a new house, but aren't sure how you should get together a down payment?

Slash your budget and build up savings. Look for ways to trim your monthly expenditures to put away money for a down payment. You might also try enrolling in an automatic savings plan to have a portion of your pay automatically transferred into savings. Some practical approaches to save additional funds include moving into less expensive housing, and skipping a year's vacation.

Sell items you don't need and find a part-time job. Maybe you can get a second job to get your down payment money. You can also get creative about the items you migh be able to put up for sale. Maybe you have desirable items you can sell at an auction website, or household items for a tag or garage sale. Also, you can think about selling any investments you own.

Borrow from your retirement funds. Investigate the parameters of your retirement plan. You may pull out funds from a 401(k) plan for a down payment or withdraw from an IRA. Make sure you understand the tax ramifications, your obligation for repaying the money, and possible penalties for withdrawing early.

Ask for assistance from members of your family. Many homebuyers are sometimes lucky enough to get help with their down payment help from gracious parents and other family members who may be anxious to help them get into their first home. Your family members may be eager to help you reach the milestone of buying your own home.

Research housing finance agencies. Provisional mortgate loan programs are provided to buyers in specific situations, like low income buyers or people planning to renovating homes in a targeted part of town, among others. Financing with this type of agency, you can get an interest rate that is below market, down payment assistance and other benefits. These kinds of agencies may help you with a lower rate of interest, help with your down payment, and provide other benefits. These non-profit agencies 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 functions as part of the U.S. Department of Housing and Urban Development (HUD), plays a vital role in helping low to moderate-income individuals get mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA provides mortgage insurance to private lenders, enabling buyers who might not be eligible for a traditional mortgage, to obtain financing. Interest rates for an FHA mortgage typically feature the market interest rate, but the down payment for an FHA loan will be less than those of conventional loans. Closing costs can be covered by the mortgage, while the down payment may be as low as 3% of the total.

  • VA mortgages

    With a guarantee from the Department of Veterans Affairs, a VA loan qualifies service people and veterans. This particular loan requires no down payment, has limited closing costs, and provides a competitive interest rate. Although the VA doesn't finance the loans, it does issue a certificate of eligibility to qualify for a VA loan.

  • Piggy-back loans

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

  • Carry-Back loans

    In a "carry back" situation, the seller agrees to lend you part of his own equity to help you get your down payment funds. The buyer funds the highest percentage of the purchase price with a traditional mortgage program and finances the remaining funds with the seller. Usually this kind of second mortgage will have a higher rate of interest.

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

Need to talk about down payment options? Give us a call: 720-598-8300.

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