Your Down Payment

Lots of buyers can qualify for a loan, but they can't afford a large down payment. Do you want to buy a new house, but don't know how you should get together a down payment?

Tighten your belt and save. Scrutinize the budget to discover ways you can cut expenses to save for your down payment. There are bank programs in which some of your paycheck is automatically placed into savings every pay period. Some effective strategies to put together funds include moving into less expensive housing, and skipping a year's vacation.

Work a second job and sell things you don't need. Maybe you can get a second job and build up your earnings. You can also get creative about the items you can sell. Multiple small things can add up to a fair amount at a garage or tag sale. Also, you might want to think about selling any investments you hold.

Tap into retirement funds. Check the provisions of your specific plan. Many homebuyers get down payment money from withdrawing funds from their IRAs or getting funds out of 401(k) plans. Be sure to find out about the tax ramifications, repayment terms, and early withdrawal penalties.

Ask for a gift from family. Many buyers are sometimes fortunate enough to get help with their down payment assistance from giving parents and other family members who are prepared to help get them in their first home. Your family members may be eager to help you reach the goal of having your first home.

Research housing finance agencies. These agencies provide provisional mortgage loans to low and moderate-income borrowers, buyers with an interest in rehabilitating a house in a targeted area, and other specific kinds of buyers as specified by the finance agency. With the help of a housing finance agency, you probably will receive an interest rate that is below market, down payment assistance and other advantages. These types of agencies may assist eligible homebuyers with a reduced rate of interest, get you your down payment, and provide other advantages. The main purpose of not-for-profit housing finance agencies is to promote the purchase of homes in targeted parts of the city.

Explore no-down and low-down mortgages.

• FHA mortgages

  The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in assisting low and moderate-income Americans qualify for mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA aids first-time buyers and others who would not be eligible for a traditional loan by themselves, by offering mortgage insurance to the private lenders. Down payment sums for FHA loans are below those with typical mortgage loans, even though these loans come with current rates of interest. Closing costs can be covered by the mortgage, and the down payment may be as low as 3% of the total amount.

• VA mortgages

  Guaranteed by the Department of Veterans Affairs, a VA loan is offered to service people and veterans. This specialized loan requires no down payment, has reduced closing costs, and provides a competitive interest rate. Even though the loans don't originate from the VA, the department verfifies applicants by issuing eligibility certificates.

• Piggy-back loans

  You can fund your down payment with a second mortgage that closes at the same time as the first. Generally the first mortgage is for 80% of the cost of the home and the "piggyback" is for 10%. In contrast to the usual 20 percent down payment, the buyer just has to cover the remaining 10 percent.

• Carry-Back loans

  In the case of a seller "carrying back a second mortgage," the seller loans you part of his or her equity. The buyer funds most of the purchase price with a traditional mortgage program and borrows the remainder from the seller. Generally, this type of second mortgage has higher interest.

No matter how you gather your down payment, the thrill of living in your own home will be just as sweet!

Need to talk about down payment options? Call us: 3032282254.