Building Your Down Payment

Many people who would like to buy a new house qualify for a mortgage loan, but they can't afford a large down payment. Below are a few straightforward methods that will help you put together a down payment

Slash your budget and build up savings. Turn your budget inside out to uncover extra money to go toward your down payment. You also could enroll in an automatic savings plan to have a percentage of your pay automatically deposited into a savings account. You might look into some big expenses in your spending history that you can give up, or trim, at least temporarily. For example, you may decide to move into less expensive housing, or stay close to home for your family vacation.

Work more and sell things you don't need. Look for a second job. This can be exhausting, but the temporary trial can provide your down payment money. You can also get creative about the items you can sell. You might own collectibles you can sell on an online auction, or quality household items for a garage or tag sale. You could also look into what your investments may bring if sold.

Borrow from your retirement funds. Explore the details of your individual plan. Some people get down payment money by withdrawing funds from their IRAs or getting funds out of 401(k) programs. You will need to be sure you understand about any penalties, the way this could affect on income taxes, and repayment terms.

Request a generous gift from family. First-time homebuyers somtimes get down payment assistance from thoughtful family members who may be willing to help them get into their own home. Your family members may be inclined to help you reach the goal of having your own home.

Contact housing finance agencies. Provisional mortgage programs are given to buyers in specific circumstances, such as low income purchasers or people looking to renovating houses in a targeted area, among others. Working through this type of agency, you may be given a below market interest rate, down payment help and other perks. Housing finance agencies can help eligible homebuyers with a lower rate of interest, help with your down payment, and offer other advantages. The main goal of non-profit housing finance agencies is to boost residence ownership in targeted parts of the city.

Research no-down and low-down mortgage loans.

• FHA mortgage loans

  The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in aiding 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) assists individuals in getting mortgage loans. FHA aids first-time homebuyers and others who would not be able to qualify for a traditional loan on their own, by providing mortgage insurance to lenders. Down payment totals for FHA loans are lower than those with typical mortgages, although these loans come with current interest rates. The down payment may go as low as 3 percent while the closing costs could be included in the mortgage.

• VA loans

  VA loans are backed by the U.S. Department of Veterans Affairs. Veterens and service people can qualify for a VA loan, which generally offers a reasonable fixed rate of interest, no down payment, and minimal closing costs. While the loans are not actually issued by the VA, the department certifies borrowers by issuing eligibility certificates.

• Piggy-back loans

  You may finance your down payment using a second mortgage that closes at the same time as the first. Generally the piggyback loan is for 10 percent of the purchase price, while the first mortgage finances 80 percent. The homebuyer covers the remaining 10%, instead of putting the usual 20% down payment.

• Carry-Back loans

  In a "carry back" mortgage, the seller commits to loan you part of his home equity to assist you with your down payment money. In this scenario, you would finance the majority of the purchase price with a traditional mortgage lending institution and finance the remaining amount with the seller. Usually you'll pay a slightly higher interest rate with the loan financed by the seller.

No matter your strategy of putting together down payment money, the thrill of owning your own home will be just as sweet!

Want to discuss down payment options? Give us a call: 8433007558.