Your Down Payment

Lots of buyers qualify for several different kinds of mortgages, but they don't have much to put up the standard down payment. Below are a few ways to get together a down payment

Slash the budget and build up savings. Scrutinize the budget to uncover extra money to go toward your down payment. You also could enroll in an automatic savings plan at your bank to have a portion of your payroll automatically transferred 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.

Work a second job and sell items you don't need. Perhaps you can find an additional job to get your down payment money. In addition, you can put together a comprehensive inventory of things you can sell. Unused gold jewelry can bring a good price from local jewelers. Maybe you own desirable items you can put up for sale on an auction website, or quality household goods for a garage or tag sale. Also, you can think about selling any investments you own.

Borrow from retirement funds. Explore the details of your particular plan. Some homebuyers get down payment money from withdrawing funds from their Individual Retirement Accounts or borrowing from 401(k) plans. Be sure you are knowledgable about any penalties, the way this could affect on income taxes, and repayment terms.

Request a gift from family. First-time buyers somtimes receive help with their down payment help from caring parents and other family members who are eager to help get them in their own home. Your family members may be pleased to help you reach the goal of owning your first home.

Contact housing finance agencies. Provisional mortgage programs are given to buyers in certain situations, such as low income homebuyers or homebuyers planning to renovating houses in a particular neighborhood, among others. With the help of a housing finance agency, you probably will be given an interest rate that is below market, down payment assistance and other benefits. Housing finance agencies can help eligible homebuyers with a lower interest rate, help with your down payment, and offer other assistance. The main mission of not-for-profit housing finance agencies is boosting home ownership in certain parts of the city.

Explore no-down and low-down mortgages.

  • Federal Housing Administration (FHA) loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in aiding low to moderate-income families get mortgage loans. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals who wish to get home financing. FHA offers mortgage insurance to private lenders, making the buyers eligible for a mortgage. Down payment totals for FHA loans are less than those for typical mortgages, even though these mortgages come with average interest rates. Closing costs might be financed within the mortgage, while your down payment could be as low as 3 percent of the total amount.

  • VA loans

    Guaranteed by the Department of Veterans Affairs, a VA loan qualifies veterens and service people. This specialized loan requires no down payment, has mimimal closing costs, and provides the benefit of a competitive interest rate. Although the mortgage loans are not actually provided by the VA, the department verfifies applicants by providing eligibility certificates.

  • Piggy-back loans

    You can finance a down payment through a second mortgage that closes at the same time as the first. Usually the piggyback loan is for 10 percent of the home's price, while the first mortgage covers 80 percent. Instead of the usual 20 percent down payment, the homebuyer will just have to cover the remaining 10 percent.

  • Carry-Back loans

    With a carry-back mortgage, the you borrow part of the seller's home equity.. You would finance the largest portion of the purchase price with a traditional lender and borrow the remainder from the seller. Usually this kind of second mortgage will have a higher rate of interest.

The feeling of accomplishment will be the same, no matter which approach you use to get together the down payment. Your new home will be worth it!

Need to talk about the best options for down payments? Call us: (334) 285-8850.

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