Building Your Down Payment

Lots of buyers qualify for a mortgage loan, but they can't afford a large down payment. Here are a few methods that will help you put together a down payment

Tighten your belt and save. Scrutinize the budget to discover ways you can cut expenses to go toward your down payment. There are bank programs through which a portion of your take-home pay is automatically placed into a savings account each pay period. You could look into some big expenses in your spending history that you can do without, or trim, at least temporarily. For example, you might decide to move into less expensive housing, or stay local for your annual vacation.

Work more and sell things you don't need. Try to find 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 jewelers. Maybe you own collectibles you can put up for sale at an auction website, or household items for a garage or tag sale. Also, you can look into selling any investments you hold.

Borrow your down payment from a retirement plan. Check the provisions of your specific program. You can pull out money from a 401(k) plan for you down payment or withdraw from an Individual Retirement Account. Make sure you comprehend the tax ramifications, your obligation for repayment, and any early withdrawal penalties.

Ask for a gift from your family. Many buyers somtimes receive help with their down payment help from thoughtful family members who may be anxious to help get them in their first home. Your family members may be inclined to help you reach the goal of buying your first home.

Contact housing finance agencies. These agencies provide special mortgate loan programs- for moderate and low income homebuyers, buyers interested in renovating a residence in a particular part of the city, and additional groups as specified by the agency. Working with this kind of agency, you may receive a below market interest rate, down payment assistance and other advantages. These kinds of agencies may assist eligible homebuyers with a lower rate of interest, get you your down payment, and provide other assistance. The principal mission of not-for-profit housing finance agencies is boosting the purchase of homes in specific areas.

Find out about low-down and no-down mortgage loans.

• Federal Housing Administration (FHA) mortgage loans

  The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays a critical role in helping low to moderate-income buyers qualify for mortgage loans. 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 private lenders, ensuring the buyers are eligible for a home loan. Interest rates for an FHA mortgage normally feature the going interest rate, while the down payment with an FHA mortgage are lower than those of conventional loans. The down payment can be as low as three percent while the closing costs may be financed in the mortgage.

• VA loans

  VA loans are backed by the U.S. Department of Veterans Affairs. Veterens and service people are eligible for a VA loan, which typically offers a competitive rate of interest, no down payment, and minimal closing costs. Even though the mortgage loans don't originate from the VA, the department verfifies applicants by providing eligibility certificates.

• Piggy-back loans

  You may finance your down payment with a second mortgage that closes with the first. Usually the piggyback loan is for 10 percent of the purchase amount, while the first mortgage finances 80 percent. The borrower pays the remaining 10%, rather than putting the typical 20% down payment.

• Carry-Back loans

  We a seller carries back a second mortgage, the seller loans you part of his or her equity. The buyer finances the majority of the purchase price through a traditional mortgage program and finances the remaining funds with the seller. Usually you will pay a slightly higher rate on the loan financed by the seller.

No matter your method of pulling together your down payment, the thrill of reaching the goal of owning your own home will be just as great!

Need to talk about the best options for down payments? Give us a call: 816-272-5550.