Putting Together Your Down Payment
Lots of buyers can easily qualify for a mortgage loan, but they don't have a large sum of cash to put up the standard down payment. Here are a few ways to put together your down payment
Cut expenses and save. Scrutinize the budget to uncover extra money to go toward your down payment. There are bank programs through which some of your paycheck is automatically deposited into savings every pay period. Some practical methods to put together funds include moving into housing that is less expensive, and staying home for your vacation this year.
Sell items you don't need and find a second job. Maybe you can get a second job to get your down payment money. Additionally, you can make an exhaustive list of things you can sell. Unused gold jewelry can bring a good price from local jewelers. A closetful of small items can add up to a nice sum at a garage or tag sale. Also, you can consider selling any investments you hold.
Borrow money from a retirement plan. Check the parameters of your specific program. You can borrow money from a 401(k) plan for a down payment or make a withdrawal from an IRA. Be sure to learn about the tax consequences, your obligation for repayment, and possible penalties for withdrawing early.
Ask for help from generous members of your family. Many buyers somtimes receive help with their down payment assistance from caring parents and other family members who are prepared to help them get into their first home. Your family members may be inclined to help you reach the milestone of owning your first home.
Research housing finance agencies. Special mortgate loan programs are extended to buyers in certain circumstances, like low income homebuyers or homebuyers planning to improve homes in a targeted part of town, among others. With the help of this type of agency, you can be given a below market interest rate, down payment help and other perks. These types of agencies can help you with a reduced rate of interest, get you your down payment, and provide other assistance. These non-profit programs exist to promote community in specific areas.
Explore no-down and low-down mortgage loan programs.
- 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 part in helping low and moderate-income buyers get mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get
FHA offers mortgage insurance to the private lenders, enabling buyers who will not be eligible for a typical loan, to get home financing.
Down payment sums for FHA loans are lower than those for typical mortgage loans, even though these mortgages hold current interest rates. The down payment can be as low as three percent while the closing costs can be financed in the mortgage.
- VA mortgages
With a guarantee from the Department of Veterans Affairs, a VA loan assists veterens and service people. This particular loan requires no down payment, has mimimal closing costs, and offers a competitive interest rate. Even though the loans don't originate from the VA, the department certifies applicants by providing eligibility certificates.
- Piggy-back loans
A piggy-back loan is a second mortgage that closes at the same time as the first. Often the first mortgage covers 80% of the purchase price and the "piggyback" funds 10%. The homebuyer covers the remaining 10%, instead of come up with the typical 20% down payment.
- Carry-Back loans
We a seller carries back a second mortgage, the you borrow part of the seller's home equity.. The buyer finances the majority of the purchase price through a traditional mortgage program and finances the remaining funds with the seller. Typically, this kind of second mortgage has higher interest.
The satisfaction will be the same, no matter which method you use to get together the down payment. Your new home will be well worth it!
Need to talk about down payment options? Give us a call: 561-395-4264.