Building Your Down Payment

Lots of people who would like to purchase a new home can qualify for a loan, but they don't have a large sum of cash to put up the standard down payment. Here's where you start

Slash your budget and build up savings. Scrutinize the budget to discover ways you can cut expenses to save for your down payment. There are bank programs through which a portion of your take-home pay is automatically transferred into a savings account each pay period. Some effective approaches to save additional funds include moving into less expensive housing, and staying local for your vacation this year.

Sell things you don't really need and get a second job. Maybe you can find a second job and build up your earnings. You can also get serious about the possessions you actually need and the things you could be able to sell. A closetful of small items might add up to a nice sum at a garage or tag sale. Also, you might want to consider selling any investments you hold.

Borrow from retirement funds. Investigate the parameters of your retirement program. You may pull out funds from a 401(k) plan for a down payment or withdraw from an Individual Retirement Account. Make sure to ask your plan representative about the tax ramifications, repayment terms, and any penalties for withdrawing early.

Ask for assistance from family members. First-time homebuyers somtimes receive down payment assistance from gracious parents and other family members who are eager to help get them in their own home. Your family members may be eager to help you reach the milestone of buying your own home.

Research housing finance agencies. Provisional mortgage programs are provided to homebuyers in certain situations, like low income homebuyers or people planning to remodel homes in a certain area, among others. With the help of a housing finance agency, you probably will get a below market interest rate, down payment assistance and other advantages. These kinds of agencies can help eligible homebuyers with a lower interest rate, get you your down payment, and offer other advantages. The main goal of not-for-profit housing finance agencies is build up residence ownership in particular places.

Research no-down and low-down mortgages.

  • Federal Housing Administration (FHA) mortgages

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a significant part in helping low to moderate-income Americans qualify for mortgage loans. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals who need to get home financing. FHA assists first-time homebuyers and others who may not be able to qualify for a traditional loan on their own, by providing mortgage insurance to private lenders. Down payment totals for FHA mortgages are below those of typical mortgages, although these mortgages have current rates of interest. Closing costs might be included in the mortgage, while your down payment may be as low as 3 percent of the purchase price.

  • VA mortgages

    With a guarantee from the Department of Veterans Affairs, a VA loan assists veterens and service people. This special loan does not require a down payment, has reduced closing costs, and provides a competitive rate of interest. Even though the mortgages aren't actually issued by the VA, the department verfifies applicants by issuing eligibility certificates.

  • Piggy-back loans

    You can finance your down payment through a second mortgage that closes with the first. Often the first mortgage is for 80% of the cost of the home and the "piggyback" is for 10%. The homebuyer pays the remaining 10%, rather than come up with the usual 20% down payment.

  • Carry-Back loans

    With a carry-back mortgage, the you borrow part of the seller's home equity.. In this scenario, you would finance the majority of the purchase price with a traditional lender and borrow the remainder from the seller. Usually you will pay a slightly higher interest rate with the loan from the seller.

No matter your method of getting together down payment money, the thrill of living in your own home will be just as great!

Want to discuss the best options for down payments? Give us a call: 561-395-4264.

Alternative Mortgage Group

80 SW 14 Ave
Boca Raton, FL 33486