Your Down Payment

Lots of folks who would like to buy a new home can qualify for several different kinds of mortgages, but they can't afford a large down payment. Here are a few methods that will help you get together a down payment

Tighten your belt and save. Turn your budget upside-down to uncover ways you can cut expenses to go toward your down payment. Also, you can look into bank programs in which a specific portion of your take-home pay is automatically deposited into a savings account each pay period. You might look into some big expenses in your budget that you can live without, or trim, at least temporarily. Here are a couple of examples: you may move into less expensive housing, or skip a vacation.

Sell things you do not really need and get a part-time job. Maybe you can find a second job to get your down payment money. In addition, you can make a comprehensive list of items you can sell. Broken gold jewelry can bring a good amount from local jewelers. Maybe you have collectibles you can sell on an auction website, or household goods for a tag or garage sale. Also, you can look into selling any investments you own.

Borrow from retirement funds. Research the details for your individual plan. It is possible to borrow money from a 401(k) for a down payment or withdraw from an Individual Retirement Account. Be sure to learn about the tax ramifications, your obligation for repaying funds, and any penalties for withdrawing early.

Ask for a generous gift from your family. Many homebuyers are sometimes fortunate enough to receive down payment help from thoughtful parents and other family members who are anxious to help them get into their own home. Your family members may be pleased to help you reach the milestone of owning your own home.

Contact housing finance agencies. Provisional mortgate loan programs are given to homebuyers in certain circumstances, such as low income homebuyers or future homeowners looking to renovating homes in a specific place, among others. Working through a housing finance agency, you can get an interest rate that is below market, down payment help and other perks. Housing finance agencies may help eligible homebuyers with a reduced interest rate, help with your down payment, and offer other benefits. The primary purpose of non-profit housing finance agencies is promoting residence ownership in targeted places.

Research no-down and low-down mortgage loan programs.

• FHA loans

  The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in assisting low and moderate-income Americans get mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers in getting home financing. FHA provides mortgage insurance to private lenders, enabling homebuyers who might not qualify for a typical loan, to get home financing. Interest rates with an FHA loan usually feature the going interest rate, but the down payment amounts with an FHA mortgage will be lower than those of conventional loans. Closing costs can be financed in the mortgage, and the down payment may be as low as 3 percent of the total amount.

• VA mortgages

  VA loans are backed by the U.S. Department of Veterans Affairs. Veterens and service people can benefit from a VA loan, which typically offers a reasonable interest rate, no down payment, and minimal closing costs. While it's true that the mortgage loans don't originate from the VA, the department verfifies borrowers by providing eligibility certificates.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes at the same time as the first. Generally the piggyback loan is for 10 percent of the purchase amount, while the first mortgage finances 80 percent. Instead of the traditional 20 percent down payment, the homebuyer just has to cover the remaining 10 percent.

• Carry-Back loans

  In a "carry back" agreement, the seller commits to lend you a piece of his own equity to help you get your down payment money. You would borrow the majority of the purchase price from a traditional mortgage lending institution and finance the remainder with the seller. Usually this type of second mortgage has higher interest.

Want to discuss down payment options? Call us: 866-300-1550.