Your Down Payment

Many buyers qualify for several different kinds of mortgages, but they can't afford a large down payment. We have a few ideas

Tighten your belt and save. Scrutinize your budget to find ways you can cut expenses to go toward your down payment. There are bank programs in which a portion of your take-home pay 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 vacation for a year or two.

Sell things you don't really need and find a second job. Maybe you can get an additional job and save your earnings. You can also get creative about the things you migh be able to put up for sale. A closetful of small items could add up to a nice sum at a garage or tag sale. You can also explore what any investments you own may sell for.

Borrow from your retirement funds. Investigate the provisions of your retirement program. Many homebuyers get down payment money by withdrawing funds from their IRAs or borrowing from their 401(k) plans. Make sure you know about any penalties, the effect this will have on your taxes, and repayment terms.

Request a generous gift from family. Many homebuyers somtimes get down payment assistance from thoughtful family members who may be willing 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.

Research housing finance agencies. These agencies offer provisional mortgage programs for moderate and low income borrowers, buyers interested in renovating a home within a specific part of the city, and other certain types of buyers as specified by each finance agency. With the help of a housing finance agency, you may be given an interest rate that is below market, down payment assistance and other benefits. Housing finance agencies can help you with a reduced rate of interest, help with your down payment, and provide other advantages. The principal mission of non-profit housing finance agencies is to promote the purchase of homes in particular parts of the city.

Explore no-down and low-down mortgage loans.

• FHA loans

  The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays a significant role in aiding low and moderate-income buyers get mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals who need to get mortgage loans. FHA offers mortgage insurance to private lenders, enabling new homebuyers who will not be eligible for a typical mortgage loan, to obtain a mortgage. Interest rates with an FHA mortgage normally feature the market interest rate, while the down payment with an FHA mortgage will be lower than those of conventional loans. The required down payment may be as low as 3 percent and the closing costs might be covered by the mortgage.

• VA loans

  VA loans are guaranteed by the U.S. Department of Veterans Affairs. Veterens and service people can qualify for a VA loan, which generally offers a competitive fixed rate of interest, no down payment, and limited closing costs. Although the mortgages don't originate from the VA, the department certifies applicants by issuing eligibility certificates.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes along with the first. Usually the first mortgage is for 80% of the cost of the home and the "piggyback" is for 10%. The borrower covers the remaining 10%, rather than putting the typical 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 majority of the purchase price with a traditional mortgage lender and finance the remainder with the seller. Usually this kind of second mortgage has higher interest.

No matter your strategy of getting together your down payment, the satisfaction of reaching the goal of owning your own home will be just as sweet!

Want to discuss the best options for down payments? Call us: 2037296681.