Your Down Payment

Many borrowers can easily qualify for several different kinds of mortgages, but they don't have a lot of money to put up a down payment. We have a few suggestions

Tighten your belt and save. Be on the look-out for ways to trim your expenses to put away money for a down payment. You might also decide to enroll in an automatic savings plan at your bank to have a percentage of your pay automatically transferred into your savings account. Some effective approaches to put together funds include moving into a residence that is less expensive, and skipping your family vacation for a year or two.

Sell things you do not really need and get a second job. Try to get an additional job. This can be exhausting, but the temporary trial can provide your down payment money. Additionally, you can put together an exhaustive list of things you may be able to sell. Unused gold jewelry can bring a good amount from local jewelry stores. Multiple small things may add up to a fair amount at a garage or tag sale. Also, you might want to think about selling any investments you hold.

Tap into retirement funds. Research the details for your individual plan. Some homebuyers get down payment money by withdrawing funds from their IRAs or borrowing from their 401(k) plans. Be sure to learn about the tax ramifications, your obligation for repayment, and penalties for withdrawing early.

Request a gift from family. Many homebuyers are often fortunate enough to get help with their down payment assistance from gracious parents and other family members who may be anxious to help get them in their own home. Your family members may be happy at the chance to help you reach the milestone of owning your first home.

Learn about housing finance agencies. Special mortgate loan programs are extended to homebuyers in specific circumstances, such as low income purchasers or future homeowners looking to improve homes in a certain area, among others. Working through a housing finance agency, you probably will receive a below market interest rate, down payment assistance and other benefits. These types of agencies can help eligible homebuyers with a lower interest rate, get you your down payment, and offer other benefits. These non-profit programs to build up community in specific neighborhoods.

Explore no-down and low-down mortgages.

• 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 families qualify for mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA helps first-time homebuyers and others who may not be eligible for a conventional mortgage on their own, by offering mortgage insurance to the lenders. Down payment amounts for FHA loans are less than those with traditional mortgages, although these loans have average interest rates. The required down payment may be as low as 3 percent while the closing costs might be packaged in the mortgage.

• VA mortgage loans

  VA loans are guaranteed by the U.S. Department of Veterans Affairs. Service persons and veterans qualify for a VA loan, which typically offers a competitive interest rate, no down payment, and limited closing costs. Although the VA doesn't issue the loans, it does issue a certificate of eligibility to qualify for a VA mortgage.

• Piggy-back loans

  You can fund a down payment using a second mortgage that closes with the first. Generally the piggyback loan takes care of 10 percent of the purchase amount, and the first mortgage covers 80 percent. Instead of the usual 20 percent down payment, the buyer just has to pull together the remaining 10 percent.

• Carry-Back loans

  In a "carry back" situation, the seller agrees to loan you a piece of his home equity to help you with your down payment funds. In this scenario, you would finance the majority of the purchase price with a traditional lending institution and borrow the remaining amount from the seller. Typically you will pay a somewhat higher interest rate with the loan financed by the seller.

Want to discuss down payments? Call us: 7209331025.