Your Down Payment

Lots of people who are looking to buy a new home qualify for several different kinds of mortgages, but they can't afford a large down payment. Here are a few straightforward ways to get together your down payment

Cut expenses and save. Be on the look-out for ways to trim your monthly expenses to save toward a down payment. You could also try enrolling in an automatic savings plan at your bank to have a percentage of your pay automatically transferred into your savings account. Some practical ways to put together funds include moving into a residence that is less expensive, and staying home for your vacation for a year or two.

Sell items you don't really need and get a second job. Perhaps you can find a second job and save your earnings. Additionally, you can put together an exhaustive inventory of things you may be able to sell. Broken gold jewelry can bring a good amount from local jewelry stores. Multiple small things might add up to a fair amount at a garage or tag sale. Also, you might want to look into selling any investments you hold.

Borrow your down payment from a retirement plan. Investigate the parameters of your retirement program. Many people get down payment money from withdrawing what they need from their Individual Retirement Accounts or taking funds out of their 401(k) plans. Be sure you are clear about any penalties, the effect this will have on income taxes, and repayment terms.

Request a gift from family. First-time buyers are often lucky enough to receive down payment assistance from gracious parents and other family members who are anxious to help get them in their own home. Your family members may be inclined to help you reach the goal of buying your first home.

Contact housing finance agencies. Provisional loan programs are provided to homebuyers in certain situations, like low income homebuyers or homebuyers looking to improve homes in a targeted neighborhood, among others. With the help of a housing finance agency, you can be given a below market interest rate, down payment assistance and other perks. These types of agencies may assist you with a reduced rate of interest, help with your down payment, and offer other assistance. These non-profit programs to build up home ownership in certain neighborhoods.

Learn 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 a vital role in helping low and moderate-income buyers get mortgage loans. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA offers mortgage insurance to the private lenders, enabling new homebuyers who will not be eligible for a conventional mortgage loan, to get a mortgage. Interest rates for an FHA loan typically feature the market interest rate, while the down payment requirements for an FHA mortgage are less than those of conventional loans. The required down payment can go as low as 3 percent and the closing costs can be financed in the mortgage loan.

• VA mortgage loans

  Guaranteed by the Department of Veterans Affairs, a VA loan qualifies service people and veterans. This special loan requires no down payment, has limited closing costs, and offers a competitive interest rate. Although the VA doesn't actually finance the mortgage loans, it does certify eligibility to apply for a VA mortgage.

• Piggy-back loans

  You may finance your down payment through a second mortgage that closes at the same time as the first. Most of the time, the first mortgage covers 80% of the cost of the home and the "piggyback" funds 10%. Rather than the traditional 20 percent down payment, the buyer just has to pull together the remaining 10 percent.

• Carry-Back loans

  In a "carry back" situation, the seller agrees to loan you part of his own equity to help you with your down payment funds. In this scenario, you would borrow the majority of the purchase price from a traditional mortgage lender and finance the remainder with the seller. Usually this kind of second mortgage will have higher interest.

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

Want to discuss down payment options? Call us at 7205988300.