Your Down Payment

Many borrowers can qualify for various loan programs, but they don't have much to pay a down payment. Want to look into getting a new house, but aren't sure how you should put together your down payment?

Tighten your belt and save. Be on the look-out for ways to trim your expenditures to set aside funds for a down payment. There are bank programs in which some of your paycheck is automatically deposited into a savings account each pay period. Some practical methods to build up funds include moving into housing that is less expensive, and skipping your family vacation for a year or two.

Work a second job and sell things you do not need. Maybe you can get a second job to get your down payment money. You can also get serious about the possessions you really need and the items you may be able to put up for sale. A closetful of small items can add up to a fair amount at a garage or tag sale. You can also look into what your investments will bring if sold.

Borrow money from your retirement plan. Research the details of your particular plan. You may borrow funds from a 401(k) plan for a down payment or withdraw from an Individual Retirement Account. Be sure you comprehend the tax consequences, your obligation for repayment, and possible penalties for withdrawing early.

Request a gift from family. Many homebuyers are often lucky enough to receive help with their down payment assistance from caring parents and other family members who may be anxious to help get them in their first home. Your family members may be willing to help you reach the milestone of having your own home.

Learn about housing finance agencies. These agencies extend provisional loan programs to low and moderate-income homebuyers, buyers with an interest in renovating a house within a targeted part of the city, and other groups as defined by the finance agency. Working with this kind of agency, you may receive a below market interest rate, down payment help and other perks. These types of agencies can assist you with a lower rate of interest, get you your down payment, and offer other assistance. These non-profit agencies to boost community in specific neighborhoods.

Find out about low-down and no-down mortgages.

  • Federal Housing Administration (FHA) mortgage loans

    The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays a significant part in helping low to moderate-income buyers qualify for mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals who wish to get home financing. FHA offers mortgage insurance to the private lenders, ensuring the buyers are eligible for a home loan. Interest rates for an FHA mortgage typically feature the market interest rate, while the down payment with an FHA loan are lower than those of conventional loans. Closing costs may be financed in the mortgage, and your down payment may be as low as 3% of the total.

  • VA mortgages

    VA loans are guaranteed by the U.S. Department of Veterans Affairs. Service persons and veterans can qualify for a VA loan, which usually offers a competitive fixed interest rate, no down payment, and reduced closing costs. Although the mortgage loans don't originate from the VA, the office certifies applicants by providing eligibility certificates.

  • Piggy-back loans

    You can finance your down payment through a second mortgage that closes with the first. Usually the first mortgage is for 80% of the purchase price and the "piggyback" is for 10%. In contrast to the usual 20 percent down payment, the homebuyer will just have to cover the remaining 10 percent.

  • Carry-Back loans

    In the option of the seller "carrying back a second mortgage," the you borrow part of the seller's home equity.. The buyer funds the highest percentage of the purchase price with a traditional mortgage program and finances the remaining funds with the seller. Usually you will pay a somewhat higher interest rate with the loan financed by the seller.

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

Want to discuss down payments? Call us: 954.920.9799.

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