Putting Together Your Down Payment

Many buyers qualify for various loan programs, but they don't have a lot of money to put up a down payment. Here are a few straightforward methods that will help you get together a down payment

Tighten your belt and save. Scrutinize your budget to uncover ways you can cut expenses to save for your down payment. You could also try enrolling in an automatic savings plan at your bank to automatically have a predetermined portion of your paycheck deposited into savings. Some practical approaches to save additional funds include moving into a residence that is less expensive, and skipping your vacation for a year or two.

Sell things you don't really need and find a part-time job. Perhaps you can get a second job to get your down payment money. You can also get serious about the possessions you really need and the things you migh be able to sell. Multiple small things can add up to a nice sum at a garage or tag sale. You could also look into what your investments will bring if sold.

Borrow from your retirement funds. Research the details for your individual plan. Some people get down payment money by withdrawing from their Individual Retirement Accounts or pulling funds out of their 401(k) plans. Make sure you know about any penalties, the effect this could have on taxes, and repayment terms.

Ask for help from members of your family. Many homebuyers are sometimes fortunate enough to get help with their down payment help from gracious parents and other family members who may be eager to help them get into their own home. Your family members may be willing to help you reach the milestone of having your own home.

Research housing finance agencies. Special mortgate loan programs are extended to buyers in specific situations, such as low income purchasers or people looking to remodel homes in a specific neighborhood, among others. Financing through this type of agency, you may get an interest rate that is below market, down payment assistance and other benefits. These types of agencies can assist eligible homebuyers with a lower rate of interest, get you your down payment, and provide other assistance. These non-profit agencies to build up home ownership in certain neighborhoods.

Find out about low-down and no-down mortgages.

  • FHA mortgages

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a significant role in assisting low and moderate-income individuals qualify for mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA helps first-time homebuyers and others who may not be eligible for a conventional mortgage on their own, by providing mortgage insurance to private lenders. Interest rates for an FHA mortgage are normally the market interest rate, while the down payment with an FHA loan are lower than those of conventional loans. The required down payment can be as low as three percent and the closing costs can be covered by the mortgage.

  • VA mortgage loans

    VA loans are backed by the U.S. Department of Veterans Affairs. Service persons and veterans can get a VA loan, which typically offers a competitive fixed interest rate, no down payment, and reduced closing costs. While it's true that the mortgage loans don't originate from the VA, the office verfifies applicants by issuing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that you close along with the first. Generally the piggyback loan is for 10 percent of the purchase amount, and the first mortgage finances 80 percent. Rather than the traditional 20 percent down payment, the buyer just has to pull together the remaining 10 percent.

  • Carry-Back loans

    In a "carry back" situation, the seller agrees to loan you part of his own equity to help you with your down payment money. You would borrow the largest portion of the purchase price from a traditional mortgage lending institution and borrow the remaining amount from the seller. Usually this type of second mortgage will have higher interest.

The feeling of accomplishment will be the same, no matter how you manage to get together the down payment. Your brand new home will be your reward!

Want to discuss your down payment? Give us a call at 561-395-4264.

Alternative Mortgage Group

80 SW 14 Ave
Boca Raton, FL 33486