Your Down Payment

Many folks who are looking to buy a new house qualify for several different kinds of mortgages, but they can't afford a large down payment. Here's where you start

Tighten your belt and save. Be on the look-out for ways you can reduce your expenditures to set aside funds for a down payment. You might also decide to enroll in an automatic savings plan at your bank to have a percentage of your payroll automatically transferred into savings. Some effective approaches to save additional funds include moving into less expensive housing, and staying home for your family vacation for a year or two.

Work more and sell things you don't need. Look for a second job. This can be exhausting, but the temporary difficulty can help you get your down payment. In addition, you can make an exhaustive inventory of things you can sell. Broken gold jewelry can bring a good amount from local jewelry stores. A closetful of small things may add up to a fair amount at a garage or tag sale. Also, you can think about selling any investments you hold.

Borrow money from your retirement plan. Explore the specifics of your particular plan. Some people get down payment money from withdrawing from their Individual Retirement Accounts or borrowing from 401(k) programs. Make sure to ask your plan representative about the tax ramifications, your obligation for repaying funds, and any early withdrawal penalties.

Ask for help from generous family members. First-time buyers are sometimes fortunate enough to receive down payment help from gracious parents and other family members who may be able to help get them in their first home. Your family members may be willing to help you reach the milestone of having your first home.

Contact housing finance agencies. Special mortgate loan programs are offered to buyers in specific situations, such as low income homebuyers or buyers looking to renovating homes in a targeted area, among others. With the help of this type of agency, you probably will get a below market interest rate, down payment help and other perks. Housing finance agencies may assist you with a lower rate of interest, get you your down payment, and offer other advantages. These non-profit agencies exist to build up community in specific areas.

Research no-down and low-down mortgage loans.

  • Federal Housing Administration (FHA) mortgage 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 families get mortgages. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals in qualifying for mortgage loans. FHA assists first-time buyers and others who might not be able to qualify for a traditional mortgage loan on their own, by providing mortgage insurance to the private lenders. Down payment sums for FHA mortgages are less than those for conventional mortgage loans, even though these mortgages hold average rates of interest. The required down payment may be as low as three percent and the closing costs may be packaged in the mortgage loan.

  • VA mortgages

    VA loans are guaranteed by the Department of Veterans Affairs. Veterens and service people qualify for a VA loan, which generally offers a competitive fixed interest rate, no down payment, and reduced closing costs. Even though the mortgage loans don't originate from the VA, the department verfifies applicants by issuing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes at the same time as the first. In most cases the first mortgage is for 80% of the cost of the home and the "piggyback" is for 10%. The homebuyer pays the remaining 10%, instead of come up with the usual 20% down payment.

  • Carry-Back loans

    We a seller carries back a second mortgage, the seller loans you part of his or her home equity. You would borrow the largest portion of the purchase price from a traditional lender and finance the remaining amount with the seller. Generally, this type of second mortgage has higher interest.

The satisfaction will be the same, no matter which strategy you use to come up with the down payment. Your new home will be your reward!

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