Your Down Payment

Many buyers can easily qualify for a mortgage loan, but they can't afford a large down payment. We have a few suggestions

Cut expenses and save. Be on the look-out for ways you can trim your expenses to set aside funds for a down payment. You also might enroll in an automatic savings plan at your bank to automatically have a set amount from your take-home pay deposited into your savings account. You might look into some big expenses in your budget that you can give up, or reduce, at least temporarily. Here are a couple of examples: you might decide to move into less expensive housing, or skip a family vacation.

Sell things you do not need and find a part-time job. Try to get an additional job. This can be exhausting, but the temporary trial can help you get your down payment. Additionally, you can put together an exhaustive list of things you may be able to sell. Unused gold jewelry can bring a good price from local jewelry stores. Maybe you own desirable items you can put up for sale on an online auction, or household goods for a garage or tag sale. Also, you can think about selling any investments you own.

Tap into your retirement funds. Investigate the parameters of your particular program. Many homebuyers get down payment money by withdrawing what they need from their Individual Retirement Accounts or borrowing from 401(k) programs. You will need to make sure you are clear about any penalties, the effect this may have on your income taxes, and repayment terms.

Ask for a gift from family. First-time buyers somtimes get help with their down payment assistance from caring family members who are anxious to help them get into their own home. Your family members may be pleased to help you reach the milestone of owning your own home.

Learn about housing finance agencies. Special mortgate loan programs are given to homebuyers in certain circumstances, such as low income buyers or people planning to improve houses in a particular neighborhood, among others. With the help of a housing finance agency, you may get a below market interest rate, down payment help and other perks. These types of agencies can help you with a lower rate of interest, get you your down payment, and offer other advantages. The central mission of non-profit housing finance agencies is to boost the purchase of homes in certain places.

Explore no-down and low-down mortgages.

• FHA mortgage loans

  The Federal Housing Administration (FHA), which is inside the U.S. Department of Housing and Urban Development (HUD), plays an important role in assisting low and moderate-income individuals get mortgage loans. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids homebuyers in getting home financing. FHA assists first-time homebuyers and others who might not be able to qualify for a traditional mortgage on their own, by providing mortgage insurance to private lenders. Interest rates with an FHA loan normally feature the going interest rate, while the down payment for an FHA mortgage are lower than those of conventional loans. Closing costs can be included in the mortgage, and your down payment might be as low as 3% of the total amount.

• VA mortgages

  With a guarantee from the Department of Veterans Affairs, a VA loan qualifies veterens and service people. This specialized loan requires no down payment, has reduced closing costs, and offers a competitive rate of interest. While the VA doesn't provide the mortgage loans, it does issue a certificate of eligibility to qualify for a VA loan.

• Piggy-back loans

  You can fund your down payment using a second mortgage that closes at the same time as the first. Usually the first mortgage is for 80% of the purchase amount and the "piggyback" funds 10%. The homebuyer pays the remaining 10%, instead of having to put together the usual 20% down payment.

• Carry-Back loans

  In a "carry back" agreement, the seller commits to loan you a piece of his home equity to help you get your down payment funds. The buyer funds the majority of the purchase price through a traditional mortgage program and finances the remaining funds with the seller. Usually you will pay a slightly higher interest rate on the loan financed by the seller.

Want to discuss down payments? Call us at 7205988300.