Your Down Payment

Many buyers can easily qualify for various loan programs, but they can't afford a large down payment. Want to look into getting a new house, but aren't sure how you should get together a down payment?

Tighten your belt and save. Look for ways you can trim your monthly expenses to set aside money for a down payment. You could also decide to enroll in an automatic savings plan to automatically have a specific portion of your paycheck deposited into savings. You would be wise to look into some big expenses in your budget that you can do without, or reduce, at least temporarily. Here are a couple of examples: you may decide to move into less expensive housing, or stay local for your vacation.

Work more and sell items you do not need. Perhaps you can get an additional job to get your down payment money. You can also get serious about the possessions you really need and the things you could be able to sell. A closetful of small items could add up to a fair amount at a garage or tag sale. You could also research what your investments could bring if sold.

Tap into retirement funds. Explore the details for your particular plan. Some homebuyers get down payment money by withdrawing funds from IRAs or borrowing from their 401(k) programs. Be sure you understand about any penalties, the effect this will have on income taxes, and repayment terms.

Request a generous gift from family. First-time homebuyers are often fortunate enough to receive down payment assistance from giving parents and other family members who may be able to help them get into their own home. Your family members may be pleased at the chance to help you reach the goal of having your own home.

Contact housing finance agencies. Provisional mortgate loan programs are provided to buyers in certain circumstances, such as low income purchasers or future homeowners looking to renovating houses in a targeted place, among others. Working with a housing finance agency, you can be given a below market interest rate, down payment help and other benefits. These types of agencies may assist eligible homebuyers with a reduced interest rate, get you your down payment, and provide other benefits. The principal goal of non-profit housing finance agencies is to promote the purchase of homes in particular places.

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

  • FHA mortgages

    The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in assisting low and moderate-income families get mortgage loans. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals who wish to get mortgages. FHA provides mortgage insurance to private lenders, enabling homebuyers who may not be eligible for a traditional mortgage loan, to obtain financing. Down payment amounts for FHA loans are below those of typical mortgage loans, even though these mortgages come with average interest rates. Closing costs may be financed in the mortgage, while the down payment could be as low as 3 percent of the total amount.

  • VA mortgages

    VA loans are guaranteed by the U.S. Department of Veterans Affairs. Service persons and veterans can get a VA loan, which usually offers a low interest rate, no down payment, and limited closing costs. While the VA does not provide the loans, it does certify eligibility to qualify for a VA mortgage.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that you close along with the first. Usually the piggyback loan takes care of 10 percent of the purchase price, while the first mortgage covers 80 percent. The homebuyer pays the remaining 10%, instead of putting the usual 20% down payment.

  • Carry-Back loans

    In a "carry back" agreement, the seller commits to loan you part of his own equity to help you get your down payment money. In this scenario, you would borrow the majority of the purchase price from a traditional lending institution and borrow the remaining amount from the seller. Generally, this type of second mortgage has a higher rate of interest.

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

Want to discuss your down payment? Give us a call: (800) 299-0270.

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