Putting Together Your Down Payment
Many people who are looking to buy a new house can qualify for various loan programs, but they don't have much to put up the standard down payment. Do you want to look into getting a new home, but don't know how to get together your down payment?
Tighten your belt and save. Look for ways to reduce your monthly expenditures to save toward a down payment. Also, you can look into bank programs through which a specific portion of your paycheck is automatically transferred into savings each pay period. You could look into some big expenses in your spending history that you can give up, or reduce, at least temporarily. For example, you might move into less expensive housing, or skip a family vacation.
Sell things you don't need and get a part-time job. Try to get an additional job. This can be exhausting, but the temporary difficulty can provide your down payment money. Additionally, you can make an exhaustive list of things you can sell. Unworn gold jewelry can be sold at local jewelry stores. You may own collectibles you can put up for sale on an online auction, or quality household items for a tag or garage sale. You might also research what your investments may sell for.
Tap into your retirement funds. Research the specifics of your individual plan. You may pull out money from a 401(k) for you down payment or make a withdrawal from an IRA. Be sure you comprehend the tax consequences, your obligation for repaying funds, and possible penalties for withdrawing early.
Ask for help from generous members of your family. First-time buyers somtimes receive down payment help from gracious family members who may be anxious to help them get into their own home. Your family members may be inclined to help you reach the milestone of owning your first home.
Learn about housing finance agencies. Special mortgate loan programs are extended to homebuyers in specific situations, like low income homebuyers or buyers looking to renovating houses in a certain place, among others. Working through this kind of agency, you can be given an interest rate that is below market, down payment assistance and other advantages. These types of agencies can help you with a reduced rate of interest, help with your down payment, and offer other advantages. The principal purpose of non-profit housing finance agencies is to promote the purchase of homes in targeted places.
Learn about low-down and no-down mortgages.
- FHA 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 assisting low and moderate-income buyers qualify for mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers who wish to qualify for mortgages.
FHA helps first-time homebuyers and others who may not be able to qualify for a typical mortgage by themselves, by offering mortgage insurance to the lenders.
Interest rates for an FHA mortgage generally feature the current interest rate, while the down payment amounts with an FHA loan will be smaller than those of conventional loans. The required down payment may be as low as three percent while the closing costs could be covered by the mortgage.
- VA mortgages
VA loans are backed by the U.S. Department of Veterans Affairs. Veterens and service people can get a VA loan, which usually offers a competitive interest rate, no down payment, and minimal closing costs. While the VA does not actually provide the mortgages, it does issue a certificate of eligibility to qualify for a VA mortgage.
- Piggy-back loans
You can fund your down payment using a second mortgage that closes with the first. Often the first mortgage covers 80% of the cost of the home and the "piggyback" funds 10%. The borrower covers the remaining 10%, rather than putting the typical 20% down payment.
- Carry-Back loans
In a "carry back" situation, the seller agrees to loan you some of his home equity to help you get your down payment money. The buyer finances most of the purchase price with a traditional mortgage program and borrows the remainder from the seller. Usually this type of second mortgage will have a higher rate of interest.
No matter your method of getting together your down payment, the thrill of reaching the goal of owning your own home will be just as sweet!
Need to talk about your down payment? Call us at 954.920.9799.