Your Down Payment

Many borrowers can qualify for several different kinds of mortgages, but they can't afford a large down payment. Here are a few methods that will help you get together a down payment

Reduce expenses and save. Look for ways to trim your expenses to save toward a down payment. You could also try enrolling in an automatic savings plan at your bank to automatically have a predetermined portion of your paycheck deposited into savings. Some practical methods to build up funds include moving into less expensive housing, and skipping a year's vacation.

Sell things you don't really need and find a part-time job. Maybe you can find an additional job to get your down payment money. You can also get creative about the things you migh be able to sell. Multiple small things could add up to a fair amount at a garage or tag sale. You could also explore what your investments will sell for.

Borrow from your retirement funds. Research the specifics for your individual plan. It is possible to pull out funds from a 401(k) plan for a down payment or get a withdrawal from an IRA. Make sure you understand the tax ramifications, repayment terms, and possible early withdrawal penalties.

Ask for assistance from family members. First-time buyers somtimes get down payment assistance from gracious parents and other family members who may be able to help get them in their own home. Your family members may be pleased to help you reach the milestone of buying your own home.

Research housing finance agencies. These types of agencies offer special mortgage loans for moderate and low income buyers, buyers interested in renovating a home within a targeted area, and additional certain types of buyers as specified by the finance agency. Financing through a housing finance agency, you probably will get a below market interest rate, down payment help and other incentives. These types of agencies can assist you with a reduced rate of interest, get you your down payment, and provide other advantages. These non-profit agencies exist to boost the value of homes in particular neighborhoods.

Explore no-down and low-down mortgage loan programs.

• FHA loans

  The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in aiding low and moderate-income individuals qualify for mortgages. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA provides mortgage insurance to the private lenders, enabling homebuyers who might not be eligible for a typical mortgage, to obtain a mortgage. Interest rates with an FHA loan usually feature the market interest rate, while the down payment requirements with an FHA mortgage are lower than those of conventional loans. Closing costs might be included in the mortgage, and the down payment could be as low as 3% of the total amount.

• VA loans

  VA loans are backed by the U.S. Department of Veterans Affairs. Veterens and service people can get a VA loan, which generally offers a competitive fixed interest rate, no down payment, and minimal closing costs. Even though the VA doesn't actually finance the mortgages, it does issue a certificate of eligibility to qualify for a VA mortgage.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes with the first. Most of the time, the piggyback loan takes care of 10 percent of the purchase amount, and the first mortgage covers 80 percent. Rather than the traditional 20 percent down payment, the buyer just has to pull together the remaining 10 percent.

• Carry-Back loans

  We a seller carries back a second mortgage, the seller loans you part of his or her home equity. You would borrow the majority of the purchase price from a traditional lending institution and borrow the remaining amount from the seller. Typically you will pay a somewhat higher interest rate on the loan from the seller.

No matter how you gather your down payment funds, the satisfaction of reaching the goal of living in your own home will be just as great!

Want to discuss down payment options? Call us: 4702755627.