Your Down Payment

Many folks who would like to purchase a new house can qualify for several different kinds of mortgages, but they don't have much to pay the standard down payment. Do you want to buy a new home, but don't know how to put together your down payment?

Tighten your belt and save. Scrutinize the budget to discover extra money to save for your down payment. Also, you can look into bank programs in which a specific portion of your paycheck is automatically transferred into a savings account each pay period. Some practical ways to build up funds include moving into less expensive housing, and staying home for your family vacation this year.

Work a second job and sell items you do not need. Look for a second job. This can be rough, but the temporary difficulty can help you get your down payment. In addition, you can put together an exhaustive list of items you can sell. Unused gold jewelry can be sold at local jewelry stores. Multiple small items can add up to a fair amount at a garage or tag sale. Also, you can think about selling any investments you hold.

Borrow money from a retirement plan. Check the parameters of your retirement program. Many homebuyers get down payment money from withdrawing funds from Individual Retirement Accounts or borrowing from their 401(k) programs. Make sure to learn about the tax ramifications, your obligation for repaying the money, and penalties for withdrawing early.

Ask for a gift from family. Many buyers somtimes receive down payment help from caring parents and other family members who are anxious to help get them in their own home. Your family members may be inclined to help you reach the milestone of owning your first home.

Research housing finance agencies. These types of agencies provide provisional mortgate loan programs- for moderate and low income borrowers, buyers interested in sprucing up a residence within a specific area, and other specific kinds of buyers as defined by each finance agency. With the help of this kind of agency, you can get a below market interest rate, down payment assistance and other advantages. Housing finance agencies can assist eligible buyers with a lower interest rate, help with your down payment, and provide other advantages. The central goal of not-for-profit housing finance agencies is build up the purchase of homes in specific places.

Research no-down and low-down mortgages.

• Federal Housing Administration (FHA) mortgages

  The Federal Housing Administration (FHA), which is inside the U.S. Department of Housing and Urban Development (HUD), plays an important part in assisting low to moderate-income families get mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals who wish to get mortgages. FHA assists first-time buyers and others who may not be able to qualify for a traditional loan on their own, by offering mortgage insurance to private lenders. Interest rates for an FHA mortgage are usually the market interest rate, but the down payment amounts with an FHA mortgage will be below those of conventional loans. Closing costs might be financed within the mortgage, while the down payment may be as low as 3% of the total.

• VA mortgage loans

  VA loans are guaranteed by the U.S. Department of Veterans Affairs. Service persons and veterans can benefit from a VA loan, which typically offers a low fixed rate of interest, no down payment, and reduced closing costs. Although the loans don't originate from the VA, the office verfifies applicants by providing eligibility certificates.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes with the first. In most cases the first mortgage is for 80% of the purchase price and the "piggyback" funds 10%. The borrower pays the remaining 10%, instead of putting the usual 20% down payment.

• Carry-Back loans

  In a "carry back" situation, the seller agrees to lend you a portion of his home equity to help you get your down payment money. The buyer finances the highest percentage of the purchase price with a traditional mortgage program and borrows the remainder from the seller. Usually you'll pay a slightly higher interest rate with the loan from the seller.

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

Want to discuss down payments? Give us a call: 1-800-606-2794.