Your Down Payment

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Many people who are looking to purchase a new house can qualify for several different kinds of mortgages, but they don't have a lot of cash to put up the standard down payment. Here are a few straightforward methods that will help you get together a down payment

Reduce expenses and save. Turn your budget upside-down to find extra money to save for your down payment. You might also decide to enroll in an automatic savings plan at your bank to automatically have a predetermined portion of your take-home pay moved into your savings account. Some effective methods to save additional funds include moving into a residence that is less expensive, and staying home for your vacation this year.

Work a second job and sell things you don't need. Maybe you can find an additional job to get your down payment money. Additionally, you can put together an exhaustive list of things you can sell. Unworn gold jewelry can be sold at local jewelry stores. You might own desirable items you can sell at an online auction, or household goods for a tag or garage sale. You might also look into what your investments will sell for.

Borrow from a retirement plan. Research the details for your particular plan. Some homebuyers get down payment money from withdrawing what they need from Individual Retirement Accounts or taking funds out of their 401(k) programs. Be sure to ask your plan representative about the tax ramifications, your obligation for repaying the money, and any early withdrawal penalties.

Ask for help from generous members of your family. Many buyers sometimes get help with their down payment help from giving family members who may be anxious to help them get into their own home. Your family members may be eager to help you reach the milestone of having your first home.

Research housing finance agencies. These agencies offer provisional mortgage programs for moderate and low income borrowers, buyers interested in renovating a residence in a targeted area, and additional groups as defined by each finance agency. With the help of a housing finance agency, you can receive a below market interest rate, down payment assistance and other benefits. Housing finance agencies can assist eligible buyers with a lower interest rate, help with your down payment, and provide other assistance. The central purpose of non-profit housing finance agencies is promoting the purchase of homes in certain areas.

Learn about low-down and no-down mortgage loan programs.

• 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 helping low and moderate-income Americans qualify for mortgage loans. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA helps first-time homebuyers and others who would not be able to qualify for a conventional mortgage by themselves, by offering mortgage insurance to the private lenders. Interest rates with an FHA mortgage are typically the market interest rate, while the down payment requirements for an FHA loan will be below those of conventional loans. Closing costs can be included in the mortgage, while the down payment could be as low as 3 percent of the total.

• VA mortgages

  VA loans are guaranteed by the U.S. Department of Veterans Affairs. Service persons and veterans qualify for a VA loan, which usually offers a competitive fixed rate of interest, no down payment, and minimal closing costs. Even though the mortgages don't originate from the VA, the office verifies borrowers by issuing eligibility certificates.

• Piggy-back loans

  You may finance a down payment using a second mortgage that closes at the same time as the first. Generally the piggyback loan takes care of 10 percent of the home's price, and the first mortgage covers 80 percent. The homebuyer pays the remaining 10%, instead of come up with the typical 20% down payment.

• Carry-Back loans

  With a carry-back mortgage, the seller loans you part of his or her home equity. The buyer funds most of the purchase price with a traditional mortgage program and borrows the remainder from the seller. Usually you will pay a slightly higher interest rate on the loan from the seller.

Need to talk about down payments? Give us a call at 770-476-5549.