Your Down Payment

Lots of folks who would like to purchase a new home can easily qualify for several different kinds of mortgages, but they can't afford a large down payment. Want to look into getting a new home, but aren't sure how you should put together your down payment?

Tighten your belt and save. Scrutinize your budget to discover ways you can cut expenses to go toward your down payment. There are bank programs in which some of your paycheck is automatically placed into savings every pay period. Some effective approaches to save additional funds include moving into less expensive housing, and staying home for your family vacation for a year or two.

Work a second job and sell things you don't need. Perhaps you can get a second job to get your down payment money. You can also get creative about the things you can put up for sale. You might have collectibles you can sell at an online auction, or quality household goods for a garage or tag sale. You might also look into what any investments you hold may bring if sold.

Borrow money from your retirement plan. Explore the specifics for your individual plan. You may borrow funds from a 401(k) for you down payment or withdraw from an Individual Retirement Account. Make sure you understand about any penalties, the way this may affect on your taxes, and repayment terms.

Ask for a gift from your family. Many buyers are often fortunate enough to get down payment help from caring parents and other family members who are prepared to help get them in their first home. Your family members may be inclined to help you reach the goal of having your own home.

Contact housing finance agencies. Provisional mortgate loan programs are provided to homebuyers in specific situations, like low income homebuyers or future homeowners planning to remodel houses in a particular area, among others. Financing through this type of agency, you probably will get a below market interest rate, down payment assistance and other perks. These kinds of agencies can help eligible homebuyers with a lower rate of interest, help with your down payment, and provide other assistance. These non-profit programs were formed to promote the value of homes in certain places.

Learn about low-down and no-down mortgage loans.

  • Federal Housing Administration (FHA) loans

    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 helping low to moderate-income families qualify for mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals who need to qualify for mortgage loans. FHA offers mortgage insurance to private lenders, making the buyers eligible for a loan. Down payment sums for FHA mortgages are smaller than those of traditional mortgages, although these mortgages hold average interest rates. Closing costs can be financed within the mortgage, and the down payment could be as low as 3% of the purchase price.

  • VA mortgages

    VA loans are backed by the Department of Veterans Affairs. Veterens and service people can receive a VA loan, which generally offers a reasonable fixed interest rate, no down payment, and limited closing costs. Although the mortgage loans don't originate from the VA, the office certifies applicants by providing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes along with the first. Usually the first mortgage covers 80% of the cost of the home and the "piggyback" is for 10%. The borrower pays the remaining 10%, rather than come up with the typical 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 funds. The buyer finances the majority of the purchase price through a traditional mortgage program and borrows the remainder from the seller. Usually this kind of second mortgage will have higher interest.

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

Want to discuss your down payment? Call us at 561-475-2281.