Your Down Payment

Many buyers can qualify for a loan, but they don't have a lot of money to put up the standard down payment. Want to buy a new home, but don't know how you should get together your down payment?

Slash your budget and build up savings. Be on the look-out for ways to reduce your expenses to set aside funds for a down payment. There are bank programs through which some of your take-home pay is automatically deposited into savings every pay period. Some practical ways to save additional funds include moving into less expensive housing, and skipping a year's vacation.

Work more and sell items you do not need. Try to get an additional job. This can be rough, but the temporary trial can help you get your down payment. Additionally, you can put together an exhaustive list of things you may be able to sell. Unused gold jewelry can bring a good price from local jewelers. A closetful of small things may add up to a nice sum at a garage or tag sale. You can also look into what your investments may bring if sold.

Tap into retirement funds. Explore the specifics for your particular plan. Some people get down payment money from withdrawing funds from their IRAs or getting funds out of 401(k) programs. Make sure you are clear about any penalties, the way this could affect on taxes, and repayment obligation.

Ask for a generous gift from family. First-time homebuyers somtimes get help with their down payment help from thoughtful family members who may be willing to help get them in their first home. Your family members may be pleased at the chance to help you reach the milestone of owning your own home.

Research housing finance agencies. Special loan programs are extended to buyers in specific circumstances, like low income homebuyers or buyers planning to improve houses in a particular neighborhood, among others. With the help of this kind of agency, you probably will be given an interest rate that is below market, down payment help and other benefits. These types of agencies can help you with a lower rate of interest, get you your down payment, and offer other benefits. The central goal of not-for-profit housing finance agencies is to promote residence ownership in specific parts of the city.

Explore no-down and low-down mortgage loans.

  • Federal Housing Administration (FHA) mortgages

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important part 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) helps individuals get FHA offers mortgage insurance to private lenders, enabling buyers who will not qualify for a typical loan, to get a mortgage. Down payment totals for FHA loans are less than those of typical mortgages, even though these loans have average rates of interest. The down payment may go as low as 3 percent while the closing costs could be financed in the mortgage loan.

  • VA loans

    Guaranteed by the Department of Veterans Affairs, a VA loan assists service people and veterans. This particular loan requires no down payment, has limited closing costs, and provides a competitive interest rate. Even though the VA does not provide the mortgage loans, it does issue a certificate of eligibility to apply for a VA loan.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that you close along with the first. Usually the piggyback loan takes care of 10 percent of the purchase amount, while the first mortgage covers 80 percent. The borrower pays the remaining 10%, rather than putting the typical 20% down payment.

  • Carry-Back loans

    In a "carry back" mortgage, the seller agrees to lend you some of his home equity to help you get your down payment funds. You would finance the majority of the purchase price with a traditional mortgage lender and finance the remainder with the seller. Generally, this type of second mortgage will have higher interest.

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

Need to talk about down payments? Give us a call at (434) 975-5626.