Your Down Payment

Many folks who would like to buy a new house qualify for a mortgage loan, but they don't have much to put up the standard down payment. Here are a few straightforward ways to get together your down payment

Slash your budget and build up savings. Turn your budget inside out to discover ways you can cut expenses to go toward your down payment. You could also try enrolling in an automatic savings plan at your bank to have a percentage of your payroll automatically moved into savings. You would be wise to look into some big expenses in your budget that you can do without, or trim, at least temporarily. Here are a couple of examples: you might move into less expensive housing, or stay local for your annual vacation.

Sell items you don't really need and find a part-time job. Perhaps you can get an additional job to get your down payment money. Additionally, you can make a comprehensive list of things you may be able to sell. Unused gold jewelry can bring a good amount from local jewelers. Maybe you own desirable items you can sell on an online auction, or household goods for a tag or garage sale. Also, you might want to think about selling any investments you hold.

Borrow from retirement funds. Explore the details for your individual plan. It is possible to borrow funds from a 401(k) plan for you down payment or withdraw from an Individual Retirement Account. Make sure you understand about any penalties, the effect this may have on income taxes, and repayment terms.

Ask for assistance from generous family members. First-time homebuyers are often lucky enough to receive down payment help from gracious parents and other family members who are anxious to help get them in their first home. Your family members may be pleased at the chance to help you reach the milestone of having your first home.

Learn about housing finance agencies. These types of agencies offer special loan programs for moderate and low income borrowers, buyers with an interest in rehabilitating a residence in a specific area, and other particular kinds of buyers as specified by the finance agency. With the help of a housing finance agency, you may receive an interest rate that is below market, down payment assistance and other incentives. These types of agencies can help you with a reduced interest rate, help with your down payment, and provide other advantages. These non-profit programs were formed to boost home ownership in specific places.

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

  • Federal Housing Administration (FHA) mortgages

    The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in assisting low to moderate-income individuals qualify for mortgages. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals in getting mortgages. FHA helps first-time homebuyers and others who would not be eligible for a traditional loan on their own, by offering mortgage insurance to the private lenders. Down payment amounts for FHA mortgages are smaller than those of traditional mortgage loans, even though these loans have average interest rates. Closing costs can be covered by the mortgage, and the down payment could be as low as 3 percent of the purchase price.

  • VA mortgage loans

    With a guarantee from the Department of Veterans Affairs, a VA loan is offered to veterens and service people. This particular loan requires no down payment, has mimimal closing costs, and provides the benefit of a competitive rate of interest. Even though the loans don't originate from the VA, the department verfifies applicants by issuing eligibility certificates.

  • Piggy-back loans

    You may finance your down payment using a second mortgage that closes with the first. In most cases the first mortgage covers 80% of the cost of the home and the "piggyback" is for 10%. The homebuyer pays the remaining 10%, rather than come up with 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 home equity. You would finance the majority of the purchase price with a traditional mortgage lender and borrow the remaining amount from the seller. Often, this kind of second mortgage will have higher interest.

The feeling of accomplishment will be the same, no matter how you manage to get together the down payment. Your brand new home will be your reward!

Need to talk about down payment options? Call us at 405-513-7700.

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