Your Down Payment
Lots of people who are looking to purchase a new house qualify for several different kinds of mortgages, but they can't afford a large down payment. Below are a few straightforward methods that will help you get together a down payment
Slash your budget and build up savings. Scrutinize the budget to discover extra money to go toward your down payment. You could also try enrolling in an automatic savings plan to automatically have a predetermined portion of your take-home pay moved into savings. Some practical approaches to put together funds include moving into less expensive housing, and staying local for your family vacation this year.
Work more and sell things you do not need. Perhaps you can get a second job to get your down payment money. Additionally, you can put together a comprehensive inventory of things you may be able to sell. Broken gold jewelry can bring a good amount from local jewelry stores. You may have collectibles you can sell at an online auction, or quality household items for a tag or garage sale. You might also research what any investments you own could sell for.
Tap into your retirement funds. Explore the specifics of your individual plan. Some people get down payment money from withdrawing what they need from Individual Retirement Accounts or borrowing from their 401(k) plans. Be sure you understand about any penalties, the effect this will have on your taxes, and repayment terms.
Ask for help from members of your family. Many homebuyers are sometimes fortunate enough to get down payment help from caring parents and other family members who are anxious to help get them in their first home. Your family members may be pleased to help you reach the goal of owning your own home.
Learn about housing finance agencies. Provisional mortgage programs are extended to homebuyers in specific situations, such as low income purchasers or people planning to remodel houses in a particular area, among others. Working with this type of agency, you can be given a below market interest rate, down payment assistance and other advantages. Housing finance agencies can help you with a lower interest rate, help with your down payment, and provide other advantages. These non-profit programs exist to boost community in specific neighborhoods.
Research no-down and low-down mortgages.
- FHA mortgages
The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in assisting low to moderate-income families get mortgage loans. 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, enabling new homebuyers who will not be eligible for a traditional mortgage loan, to obtain financing.
Down payment amounts for FHA mortgages are smaller than those of traditional mortgage loans, although these loans hold current interest rates. The down payment can be as low as 3 percent and the closing costs might be covered by the mortgage.
- VA mortgage loans
Guaranteed by the Department of Veterans Affairs, a VA loan qualifies service people and veterans. This specialized loan requires no down payment, has limited closing costs, and provides a competitive rate of interest. While the loans don't originate from the VA, the office certifies borrowers by providing eligibility certificates.
- Piggy-back loans
You may fund a down payment with a second mortgage that closes with the first. Most of the time, the piggyback loan is for 10 percent of the purchase price, and the first mortgage covers 80 percent. The borrower pays the remaining 10%, instead of putting the usual 20% down payment.
- Carry-Back loans
In the case of a seller "carrying back a second mortgage," the seller loans you part of his or her home equity. The buyer funds the highest percentage of the purchase price through a traditional mortgage program and finances the remaining funds with the seller. Usually this type of second mortgage will have higher interest.
No matter your method of putting together your down payment, the thrill of owning your own home will be just as great!
Need to talk about the best options for down payments? Call us at 561-395-4264.