Putting Together Your Down Payment

Lots of borrowers can easily qualify for several different kinds of mortgages, but they can't afford a large down payment. Here are a few tips:

Reduce expenses and save. Be on the look-out for ways you can reduce your monthly expenditures to save toward a down payment. You might also try enrolling in an automatic savings plan at your bank to have a percentage of your payroll automatically transferred into savings. Some practical approaches to build up funds include moving into housing that is less expensive, and skipping a year's vacation.

Work more and sell items you do not need. Look for an additional job. This can be exhausting, but the temporary trial can help you get your down payment. In addition, you can make an exhaustive list of items you can sell. Unused gold jewelry can bring a good price from local jewelry stores. Multiple small things may add up to a nice sum at a garage or tag sale. You might also look into what your investments could sell for.

Borrow from retirement funds. Check the provisions of your retirement program. It is possible to take out money from a 401(k) for you down payment or withdraw from an Individual Retirement Account. Be sure you know about any penalties, the effect this could have on income taxes, and repayment obligation.

Request a gift from family. First-time homebuyers are often lucky enough to receive help with their down payment assistance from giving parents and other family members who may be able to help them get into their first home. Your family members may be willing to help you reach the milestone of buying your first home.

Contact housing finance agencies. These types of agencies provide special mortgate loan programs- for low and moderate-income homebuyers, buyers interested in renovating a house within a particular part of the city, and additional certain types of buyers as specified by each agency. Financing with this type of agency, you may get a below market interest rate, down payment assistance and other benefits. These types of agencies may assist you with a lower interest rate, get you your down payment, and provide other benefits. These non-profit programs to boost the value of homes in specific neighborhoods.

Learn about low-down and no-down mortgage loan programs.

• FHA 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 families get mortgage loans. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers who need to get mortgages. FHA offers mortgage insurance to private lenders, ensuring the buyers are eligible for a home loan. Down payment sums for FHA loans are below those with typical mortgage loans, although these loans have current interest rates. Closing costs might be covered by the mortgage, while your down payment can be as low as 3% of the purchase price.

• VA loans

  Guaranteed by the Department of Veterans Affairs, a VA loan is offered to veterens and service people. This particular loan does not require a down payment, has reduced closing costs, and offers a competitive interest rate. Although the mortgage loans aren't actually provided by the VA, the department certifies applicants by issuing eligibility certificates.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes along with the first. Most of the time, the piggyback loan takes care of 10 percent of the purchase amount, and the first mortgage covers 80 percent. Rather than the traditional 20 percent down payment, the homebuyer just has to pull together the remaining 10 percent.

• Carry-Back loans

  In a "carry back" mortgage, the seller agrees to loan you a piece of his home equity to help you get your down payment funds. In this scenario, you would borrow the majority of the purchase price from a traditional lending institution and finance the remaining amount with the seller. Often, this type of second mortgage will have higher interest.

Want to discuss your down payment? Call us: 9497706067.