Your Down Payment

Many people who would like to buy a new house qualify for a mortgage loan, but they don't have a lot of cash to put up the standard down payment. Here are a few straightforward methods that will help you put together a down payment

Reduce expenses and save. Be on the look-out for ways you can trim your monthly expenditures to put away money for a down payment. You might also try enrolling in an automatic savings plan at your bank to have a portion of your pay automatically deposited into a savings account. Some effective approaches to save additional funds include moving into less expensive housing, and skipping your family vacation for a year or two.

Sell items you don't really need and find a second job. Perhaps you can get a second job and build up your earnings. You can also seriously consider the possessions you actually need and the things you can sell. You might own collectibles you can put up for sale on an auction website, or quality household goods for a tag or garage sale. Also, you can consider selling any investments you own.

Borrow from your retirement plan. Explore the specifics for your particular plan. You can take out money from a 401(k) plan for you down payment or get a withdrawal from an Individual Retirement Account. Be sure you understand the tax ramifications, repayment terms, and possible penalties for withdrawing early.

Ask for help from generous members of your family. Many homebuyers somtimes receive down payment help from thoughtful parents and other family members who are able to help get them in their first home. Your family members may be eager to help you reach the goal of having your own home.

Learn about housing finance agencies. Provisional mortgage loans are offered to buyers in specific circumstances, like low income buyers or people looking to improve houses in a certain neighborhood, among others. With the help of a housing finance agency, you can get an interest rate that is below market, down payment assistance and other incentives. These types of agencies may assist eligible buyers with a lower rate of interest, get you your down payment, and provide other benefits. These non-profit programs to build up the value of homes in specific neighborhoods.

Explore no-down and low-down mortgage loans.

  • FHA loans

    The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays a critical part in aiding low and moderate-income individuals qualify for mortgages. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals in getting home financing. FHA assists first-time homebuyers and others who may not be able to qualify for a typical loan on their own, by offering mortgage insurance to the lenders. Interest rates with an FHA mortgage normally feature the market interest rate, while the down payment requirements with an FHA loan are below those of conventional loans. Closing costs can be included in the mortgage, and the down payment can be as low as 3 percent of the total.

  • VA mortgages

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

  • Piggy-back loans

    You can fund a down payment using a second mortgage that closes at the same time as the first. In most cases the first mortgage covers 80% of the cost of the home and the "piggyback" is for 10%. The borrower pays the remaining 10%, rather than come up with the usual 20% down payment.

  • Carry-Back loans

    With a carry-back mortgage, the seller loans you part of his or her home equity. The buyer finances the highest percentage of the purchase price with a traditional mortgage program and finances the remaining funds with the seller. Typically, this kind of second mortgage has a higher rate of interest.

No matter your strategy of putting together your down payment money, the satisfaction of owning your own home will be just as great!

Want to discuss the best options for down payments? Give us a call at 706-860-5514.

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