Your Down Payment

Many folks who would like to purchase a new home can qualify for various loan programs, but they don't have a lot of money to put up a down payment. Want to buy a new house, but aren't sure how to get together your down payment?

Cut expenses and save. Scrutinize the budget to uncover ways you can cut expenses to go toward your down payment. You also might enroll in an automatic savings plan to automatically have a predetermined amount from your paycheck moved into savings. You might look into some big expenses in your budget that you can give up, or trim, at least temporarily. For example, you may decide to move into less expensive housing, or skip a family vacation.

Sell items you don't need and find a part-time job. Perhaps you can get a second job to get your down payment money. In addition, you can make a comprehensive list of items you may be able to sell. Unworn gold jewelry can be sold at local jewelers. You may own desirable items you can sell on an online auction, or quality household items for a garage or tag sale. You can also look into what your investments could bring if sold.

Borrow money from your retirement plan. Research the specifics of your particular plan. You may pull out funds from a 401(k) for a down payment or withdraw from an IRA. Be sure to find out about the tax consequences, repayment terms, and early withdrawal penalties.

Ask for a generous gift from family. First-time buyers somtimes receive down payment help from giving parents and other family members who are willing to help them get into their first home. Your family members may be pleased to help you reach the milestone of owning your own home.

Contact housing finance agencies. These agencies offer special mortgate loan programs to moderate and low income buyers, buyers with an interest in remodeling a home within a targeted part of the city, and additional particular kinds of buyers as specified by the finance agency. With the help of a housing finance agency, you can receive an interest rate that is below market, down payment assistance and other benefits. These kinds of agencies may help you with a reduced rate of interest, get you your down payment, and offer other benefits. The central purpose of non-profit housing finance agencies is build up residential ownership in targeted areas.

Find out about low-down and no-down mortgage loans.

  • FHA loans

    The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in helping low and moderate-income individuals get mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA provides mortgage insurance to the private lenders, enabling new homebuyers who might not be eligible for a typical loan, to get a mortgage. Interest rates with an FHA loan are typically the going interest rate, but the down payment requirements with an FHA loan will be less than those of conventional loans. Closing costs might be financed within the mortgage, while your down payment could be as low as 3% of the purchase price.

  • VA mortgages

    Guaranteed by the Department of Veterans Affairs, a VA loan qualifies veterens and service people. This particular loan does not require a down payment, has reduced closing costs, and provides a competitive interest rate. While the mortgages aren't actually financed by the VA, the office certifies applicants by issuing eligibility certificates.

  • Piggy-back loans

    You can finance your down payment with a second mortgage that closes at the same time as the first. Often the first mortgage is for 80% of the cost of the home and the "piggyback" is for 10%. The homebuyer covers the remaining 10%, instead of putting the typical 20% down payment.

  • Carry-Back loans

    In the option of the seller "carrying back a second mortgage," the you borrow a portion of the seller's home equity.. You would finance the largest portion of the purchase price with a traditional mortgage lender and borrow the remainder from the seller. Often, this type of second mortgage will have higher interest.

The satisfaction will be the same, no matter which strategy you use to put together your down payment. Your new home will be well worth it!

Want to discuss down payment options? Call us: (303) 228-2254.

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