Your Down Payment

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Lots of folks who would like to purchase a new house can easily qualify for several different kinds of mortgages, but they don't have a lot of money to put up the standard down payment. Here are a few straightforward methods that will help you get together your down payment

Cut expenses and save. Scrutinize your budget to find ways you can cut expenses to go toward your down payment. You may also decide to enroll in an automatic savings plan to automatically have a predetermined amount from your paycheck deposited into savings. Some practical approaches to save additional funds include moving into less expensive housing, and skipping your family vacation for a year or two.

Work more and sell things you do not need. Look for an additional job. This can be rough, but the temporary difficulty can help you get your down payment. You can also get creative about the things you could be able to put up for sale. You may have collectibles you can sell at an online auction, or household items for a garage or tag sale. Also, you can consider selling any investments you hold.

Borrow funds from a retirement plan. Research the details for your particular plan. You may borrow money from a 401(k) plan for you down payment or perform a withdrawal from an Individual Retirement Account. Be sure you are clear about any penalties, the way this could affect on income taxes, and repayment terms.

Request a generous gift from family. First-time homebuyers sometimes receive down payment assistance from gracious parents and other family members who may be prepared to help them get into their first home. Your family members may be pleased to help you reach the milestone of having your first home.

Research housing finance agencies. Special mortgage programs are extended to homebuyers in certain situations, like low income buyers or homebuyers planning to improve houses in a particular part of town, among others. Financing through this type of agency, you can be given an interest rate that is below market, down payment assistance and other advantages. Housing finance agencies can help eligible buyers with a lower rate of interest, get you your down payment, and offer other assistance. The central mission of not-for-profit housing finance agencies is to boost the purchase of homes in specific parts of the city.

Learn about low-down and no-down mortgage loans.

  • 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 assisting low and moderate-income Americans get mortgages. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA provides mortgage insurance to the private lenders, making the buyers eligible for a home loan. Interest rates with an FHA mortgage are normally the market interest rate, while the down payment with an FHA mortgage will be below those of conventional loans. The required down payment can be as low as three percent while the closing costs might be financed in the mortgage.

  • VA mortgage loans

    VA loans are backed by the U.S. Department of Veterans Affairs. Veterens and service people can receive a VA loan, which typically offers a competitive fixed rate of interest, no down payment, and limited closing costs. Even though the loans don't originate from the VA, the office verifies borrowers by providing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes along with the first. Most of the time, the piggyback loan takes care of 10 percent of the home's price, and the first mortgage finances 80 percent. 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 borrow the largest portion of the purchase price from a traditional lender and finance the remainder with the seller. Usually you'll pay a somewhat higher rate with the loan from the seller.

The satisfaction will be the same, no matter which approach you use to pull together your down payment. Your new home will be well worth it!

Need to talk about down payments? Give us a call at (301) 773-9811.

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