Your Down Payment

Many people who would like to buy a new home can qualify for a loan, but they don't have a lot of money to put up the standard down payment. Below are a few methods that will help you get together a down payment

Reduce expenses and save. Look for ways to reduce your expenditures to set aside funds for a down payment. Also, you can look into bank programs through which a specific portion of your take-home pay is automatically deposited into savings every pay period. You might look into some big expenses in your budget that you can give up, or reduce, at least temporarily. For example, you may move into less expensive housing, or stay local for your family vacation.

Work more and sell items you don't need. Try to get an additional job. This can be rough, but the temporary trial can provide your down payment money. You can also get creative about the things you migh be able to sell. Multiple small items can add up to a nice sum at a garage or tag sale. You could also research what any investments you hold may bring if sold.

Borrow funds from your retirement plan. Check the provisions of your particular program. Many people get down payment money from withdrawing from their Individual Retirement Accounts or taking money out of their 401(k) plans. Be sure you understand the tax consequences, repayment terms, and possible early withdrawal penalties.

Ask for a generous gift from your family. First-time buyers somtimes receive help with their down payment assistance from gracious family members who are able to help get them in their own home. Your family members may be willing to help you reach the goal of buying your first home.

Learn about housing finance agencies. Special loan programs are offered to homebuyers in certain situations, such as low income buyers or homebuyers looking to renovating homes in a specific area, among others. With the help of a housing finance agency, you may get a below market interest rate, down payment assistance and other perks. Housing finance agencies may assist you with a lower rate of interest, get you your down payment, and offer other benefits. These non-profit programs were established to build up community in specific neighborhoods.

Research no-down and low-down mortgages.

• FHA loans

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a critical part in aiding low and moderate-income buyers qualify for mortgage loans. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA assists first-time buyers and others who might not be able to qualify for a traditional loan by themselves, by offering mortgage insurance to lenders. Down payment sums for FHA loans are lower than those for conventional mortgage loans, although these mortgages come with current interest rates. Closing costs might be covered by the mortgage, while your down payment might be as low as 3% of the total.

• VA mortgages

  With a guarantee from the Department of Veterans Affairs, a VA loan qualifies veterens and service people. This special loan does not require a down payment, has mimimal closing costs, and offers a competitive rate of interest. While the VA doesn't actually finance the mortgages, it does certify eligibility to qualify for a VA loan.

• Piggy-back loans

  You may finance your down payment using a second mortgage that closes with the first. Generally the piggyback loan takes care of 10 percent of the home's price, and the first mortgage finances 80 percent. The borrower covers the remaining 10%, rather than needing to put together the typical 20% down payment.

• Carry-Back loans

  In a "carry back" agreement, the seller commits to lend you a piece of his home equity to help you get your down payment funds. You would borrow the largest portion of the purchase price from a traditional lending institution and finance the remaining amount with the seller. Typically you will pay a slightly higher rate with the loan from the seller.

Need to talk about the best options for down payments? Give us a call at 7209331025.