Your Down Payment

Many people who are looking to purchase a new home qualify for various loan programs, but they can't afford a large down payment. Here are a few ways to get together your down payment

Slash your budget and build up savings. Look for ways you can reduce your expenses to save toward a down payment. You also could enroll in an automatic savings plan at your bank to automatically have a predetermined portion of your take-home pay moved into a savings account. Some practical methods to build up funds include moving into a residence that is less expensive, and staying home for your vacation this year.

Sell things you don't really need and find a second job. Perhaps you can find a second job to get your down payment money. Additionally, you can put together an exhaustive list of items you can sell. Broken gold jewelry can bring a good price from local jewelers. Maybe you own desirable items you can sell at an online auction, or household goods for a tag or garage sale. You can also look into what your investments could sell for.

Borrow from retirement funds. Research the specifics for your individual plan. Some homebuyers get down payment money by withdrawing what they need from Individual Retirement Accounts or borrowing from their 401(k) plans. Be sure you understand about any penalties, the effect this will have on income taxes, and repayment terms.

Ask for a gift from your family. Many buyers somtimes get down payment assistance from gracious parents and other family members who are anxious to help get them in their first home. Your family members may be inclined to help you reach the goal of having your first home.

Research housing finance agencies. Provisional mortgage loans are extended to buyers in specific circumstances, like low income buyers or homebuyers looking to improve houses in a specific part of town, among others. With the help of this kind of agency, you may be given an interest rate that is below market, down payment assistance and other advantages. Housing finance agencies can assist you with a reduced interest rate, help with your down payment, and offer other assistance. These non-profit agencies were established to build up the value of homes in certain places.

Learn about low-down and no-down mortgage loans.

  • FHA loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in aiding low to moderate-income Americans qualify for mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA assists first-time buyers and others who may not be eligible for a traditional mortgage by themselves, by offering mortgage insurance to lenders. Down payment totals for FHA loans are below those of typical mortgage loans, even though these mortgages have average interest rates. The required down payment may be as low as three percent and the closing costs can be covered by the mortgage loan.

  • VA mortgage loans

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

  • Piggy-back loans

    A piggy-back loan is a second mortgage that you close along with the first. In most cases the first mortgage is for 80% of the cost of the home and the "piggyback" is for 10%. The borrower covers the remaining 10%, rather than come up with the typical 20% down payment.

  • 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 the highest percentage of the purchase price with a traditional mortgage program and borrows the remaining funds from the seller. Typically you'll pay a somewhat higher rate with the loan financed by the seller.

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

Need to talk about your down payment? Call us: 972.798.2110.