Your Down Payment

Lots of borrowers qualify for a mortgage loan, but they don't have much to put up a down payment. Here are a few straightforward ways to put together a down payment

Slash your budget and build up savings. Scrutinize your budget to discover ways you can cut expenses to go toward your down payment. You could also try enrolling in an automatic savings plan at your bank to automatically have a specific portion of your paycheck moved into your savings account. You could look into some big expenses in your spending history that you can do without, or reduce, at least temporarily. Here are a couple of examples: you might move into less expensive housing, or stay local for your family vacation.

Work a second job and sell items you do not need. Perhaps you can find a second job to get your down payment money. You can also get creative about the items you can sell. Maybe you own desirable items you can sell on an online auction, or quality household items for a tag or garage sale. You might also explore what any investments you own could bring if sold.

Borrow money from a retirement plan. Research the specifics of your particular plan. You may borrow money from a 401(k) for you down payment or withdraw from an IRA. Make sure you understand the tax ramifications, repayment terms, and possible early withdrawal penalties.

Ask for help from family members. First-time homebuyers somtimes get help with their down payment help from caring family members who are able to help them get into their own home. Your family members may be eager to help you reach the goal of having your first home.

Learn about housing finance agencies. Provisional mortgate loan programs are extended to buyers in certain circumstances, like low income purchasers or people planning to remodel houses in a certain place, among others. Financing with this type of agency, you can receive a below market interest rate, down payment assistance and other perks. Housing finance agencies may help you with a lower rate of interest, get you your down payment, and offer other assistance. The principal purpose of not-for-profit housing finance agencies is to boost home ownership in specific places.

Explore no-down and low-down mortgage loan programs.

  • FHA mortgage 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 to moderate-income individuals qualify for mortgage loans. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA helps first-time homebuyers and others who might not be able to qualify for a conventional loan on their own, by providing mortgage insurance to private lenders. Interest rates for an FHA loan are typically the market interest rate, but the down payment requirements for an FHA mortgage will be lower than those of conventional loans. Closing costs might be financed in the mortgage, and your down payment can be as low as 3% of the total amount.

  • VA mortgages

    VA loans are guaranteed by the U.S. Department of Veterans Affairs. Veterens and service people can receive a VA loan, which generally offers a low rate of interest, no down payment, and reduced closing costs. While the VA doesn't issue the mortgage loans, it does issue a certificate of eligibility to qualify for a VA loan.

  • Piggy-back loans

    You can fund a down payment through 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. In contrast to the usual 20 percent down payment, the homebuyer just has to cover the remaining 10 percent.

  • Carry-Back loans

    We a seller carries 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 lending institution and borrow the remaining amount from the seller. Often, this type of second mortgage has a higher rate of interest.

No matter your method of pulling together your down payment, the satisfaction of living in your own home will be just as sweet!

Need to talk about down payment options? Give us a call: (303) 228-2254.

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