Your Down Payment

Lots of borrowers can easily qualify for several different kinds of mortgages, but they don't have a lot of cash to put up the standard down payment. Here are a few straightforward methods that will help you put together a down payment

Reduce expenses and save. Turn your budget upside-down to discover ways you can cut expenses to save for your down payment. There are bank programs in which a specific portion of your take-home pay is automatically transferred into a savings account every pay period. You would be wise to look into some big expenses in your budget that you can do without, or trim, at least temporarily. For example, you may decide to move into less expensive housing, or stay local for your annual vacation.

Sell items you do not need and find a part-time job. Look for a second job. This can be rough, but the temporary trial can help you get your down payment. You can also get creative about the things you can put up for sale. Maybe you have collectibles you can sell at an auction website, or household goods for a tag or garage sale. Also, you might want to think about selling any investments you hold.

Tap into your retirement funds. Investigate the provisions of your particular program. Many people get down payment money by withdrawing funds from IRAs or taking money out of their 401(k) plans. Be sure you understand about any penalties, the way this will affect on income taxes, and repayment terms.

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

Learn about housing finance agencies. These types of agencies provide special mortgage loans for low and moderate-income homebuyers, buyers interested in renovating a residence within a specific area, and other specific kinds of buyers as specified by each agency. Financing through this kind of agency, you may be given a below market interest rate, down payment assistance and other benefits. Housing finance agencies may help you with a lower rate of interest, get you your down payment, and provide other assistance. The primary mission of non-profit housing finance agencies is to promote residential ownership in particular parts of the city.

Find out 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 an important role in assisting low to moderate-income families get mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals in qualifying for mortgage loans. FHA aids first-time homebuyers and others who would not be eligible for a conventional mortgage loan on their own, by offering mortgage insurance to lenders. Interest rates for an FHA loan usually feature the going interest rate, but the down payment requirements for an FHA loan will be below those of conventional loans. The down payment may go as low as 3 percent while the closing costs may be financed in the mortgage loan.

  • VA loans

    VA loans are guaranteed by the U.S. Department of Veterans Affairs. Veterens and service people can receive a VA loan, which typically offers a reasonable interest rate, no down payment, and minimal closing costs. While it's true that the mortgage loans are not actually issued by the VA, the department verfifies borrowers by providing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that you close with the first. Generally the piggyback loan is for 10 percent of the home's price, while the first mortgage covers 80 percent. In contrast to the traditional 20 percent down payment, the homebuyer will just have to cover the remaining 10 percent.

  • Carry-Back loans

    In a "carry back" mortgage, the seller agrees to lend you a piece of his home equity to help you with your down payment money. You would borrow the largest portion of the purchase price from a traditional mortgage lending institution and borrow the remaining amount from the seller. Often, this kind of second mortgage will have higher interest.

The feeling of accomplishment will be the same, no matter which approach you use to put together your down payment. Your new home will be worth it!

Want to discuss your down payment? Call us: 954.920.9799.

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