Your Down Payment

Lots of people who are looking to purchase a new home can easily qualify for several different kinds of mortgages, but they don't have a large sum of cash to put up the standard down payment. We have a few suggestions

Tighten your belt and save. Be on the look-out for ways you can trim your expenses to save toward a down payment. You could also try enrolling in an automatic savings plan at your bank to automatically have a specific portion of your take-home pay deposited into your savings account. You would be wise to look into some big expenses in your spending history that you can do without, or trim, at least temporarily. Here are a couple of examples: you may move into less expensive housing, or stay close to home for your vacation.

Work more and sell items you do not need. Try to get an additional job. This can be exhausting, but the temporary trial can provide your down payment money. In addition, you can put together a comprehensive list of things you may be able to sell. Unworn gold jewelry can be sold at local jewelry stores. A closetful of small items could add up to a fair amount at a garage or tag sale. You might also research what your investments could bring if sold.

Borrow from retirement funds. Explore the details of your individual plan. Many people get down payment money from withdrawing what they need from IRAs or getting funds out of 401(k) plans. Be sure to learn about the tax ramifications, your obligation for repaying the money, and any penalties for withdrawing early.

Ask for help from generous family members. First-time buyers are often lucky enough to receive down payment help from giving parents and other family members who may be anxious to help get them in their own 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 special mortgage loans for low and moderate-income homebuyers, buyers with an interest in remodeling a house within a targeted part of the city, and additional groups as specified by each finance agency. Working with this type of agency, you may receive an interest rate that is below market, down payment help and other perks. These types of agencies may help eligible buyers with a lower rate of interest, get you your down payment, and provide other advantages. The principal mission of non-profit housing finance agencies is boosting home ownership in specific places.

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

• 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 helping low and moderate-income individuals qualify for mortgages. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA assists first-time homebuyers and others who would not be eligible for a traditional mortgage by themselves, by providing mortgage insurance to private lenders. Down payment sums for FHA loans are below those for conventional mortgage loans, although these mortgages hold average interest rates. The down payment can go as low as 3 percent while the closing costs can be financed in the mortgage.

• VA mortgages

  Guaranteed by the Department of Veterans Affairs, a VA loan qualifies service people and veterans. This particular loan does not require a down payment, has mimimal closing costs, and offers a competitive interest rate. Even though the VA doesn't issue the mortgage loans, it does certify eligibility to apply for a VA loan.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes with the first. Most of the time, the piggyback loan is for 10 percent of the purchase price, and the first mortgage finances 80 percent. The homebuyer pays the remaining 10%, rather than having to pull together the typical 20% down payment.

• Carry-Back loans

  In the option of a seller "carrying back a second mortgage," the you borrow part of the seller's home equity.. You would finance the largest portion of the purchase price with a traditional mortgage lender and borrow the remaining amount from the seller. Usually this type of second mortgage has a higher rate of interest.

No matter your method of getting together your down payment, the thrill of reaching the goal of living in your own home will be just as great!

Want to discuss down payments? Give us a call: 720-598-8300.