Your Down Payment
Many folks who would like to purchase a new house qualify for various loan programs, but they don't have a large sum of cash to put up the standard down payment. Below are a few straightforward ways to put together a down payment
Slash your budget and build up savings. Be on the look-out for ways you can trim your monthly expenses to put away money for a down payment. Also, you can look into bank programs through which some of your take-home pay is automatically deposited into a savings account every pay period. You could 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 decide to move into less expensive housing, or stay local for your vacation.
Sell items you don't really need and get a second job. Try to get a second job. This can be exhausting, but the temporary trial can provide your down payment money. You can also seriously consider the possessions you actually need and the things you can sell. Multiple small items could add up to a fair amount at a garage or tag sale. You could also research what any investments you have may bring if sold.
Borrow funds from your retirement plan. Investigate the parameters of your particular plan. Some people get down payment money from withdrawing funds from Individual Retirement Accounts or taking funds out of their 401(k) plans. You will need to ensure you understand about any penalties, the way this will affect on income taxes, and repayment terms.
Ask for help from generous members of your family. First-time homebuyers somtimes receive down payment help from thoughtful parents and other family members who are able to help them get into their own home. Your family members may be pleased at the chance to help you reach the goal of owning your first home.
Learn about housing finance agencies. Provisional loan programs are offered to buyers in certain situations, such as low income buyers or buyers planning to improve homes in a particular area, among others. Financing with this kind of agency, you can receive a below market interest rate, down payment assistance and other perks. Housing finance agencies can help eligible homebuyers with a reduced rate of interest, get you your down payment, and offer other advantages. The central goal of non-profit housing finance agencies is promoting the purchase of homes in certain areas.
Explore no-down and low-down mortgage loan programs.
- FHA mortgage loans
The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in helping low to moderate-income buyers get mortgage loans. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids homebuyers who wish to get home financing.
FHA assists first-time buyers and others who may not be able to qualify for a traditional mortgage loan by themselves, by offering mortgage insurance to the private lenders.
Interest rates for an FHA loan are normally the market interest rate, while the down payment for an FHA loan will be lower than those of conventional loans. The required down payment may be as low as three percent while the closing costs might be packaged in the mortgage loan.
- VA mortgages
Guaranteed by the Department of Veterans Affairs, a VA loan assists veterens and service people. This particular loan does not require a down payment, has limited closing costs, and provides a competitive rate of interest. Although the mortgages are not actually issued by the VA, the department verfifies applicants by providing eligibility certificates.
- Piggy-back loans
You may finance your down payment through a second mortgage that closes along with the first. Most of the time, the piggyback loan takes care of 10 percent of the purchase amount, and the first mortgage covers 80 percent. The borrower covers the remaining 10%, rather than come up with the usual 20% down payment.
- Carry-Back loans
With a carry-back mortgage, the seller loans you part of his or her equity. You would finance the largest portion of the purchase price with a traditional lender and finance the remaining amount with the seller. Usually you'll pay a somewhat higher rate on the loan financed by the seller.
No matter your strategy of putting together your down payment, the satisfaction of living in your own home will be just as sweet!
Need to talk about down payments? Give us a call: (203) 729-6681.