Putting Together Your Down Payment

Lots of borrowers qualify for a loan, but they can't afford a large down payment. Below are a few straightforward methods that will help you get together your down payment

Tighten your belt and save. Scrutinize the budget to discover ways you can cut expenses to save for your down payment. There are bank programs in which some of your take-home pay is automatically deposited into savings every pay period. Some effective strategies to put together funds include moving into a residence that is less expensive, and staying home for your vacation this year.

Work more and sell things you don't need. Perhaps you can get a second job to get your down payment money. You can also seriously consider the possessions you actually need and the items you can put up for sale. You may have desirable items you can put up for sale on an online auction, or household items for a garage or tag sale. You could also look into what any investments you hold could bring if sold.

Borrow from a retirement plan. Investigate the provisions of your specific plan. It is possible to take out funds from a 401(k) for you down payment or withdraw from an Individual Retirement Account. You will need to be sure you are knowledgable about any penalties, the way this may affect on taxes, and repayment terms.

Ask for help from generous members of your family. Many buyers are sometimes lucky enough to receive down payment help from thoughtful family members who may be able to help them get into their first home. Your family members may be eager to help you reach the goal of having your first home.

Learn about housing finance agencies. These agencies offer special mortgate loan programs- for low and moderate-income buyers, buyers with an interest in renovating a home in a specific area, and other groups as defined by each agency. Financing with a housing finance agency, you probably will be given a below market interest rate, down payment help and other perks. These kinds of agencies may help eligible homebuyers with a reduced interest rate, help with your down payment, and offer other advantages. These non-profit programs were established to promote home ownership in certain areas.

Find out about low-down and no-down mortgage loans.

• 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 Americans get mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids homebuyers in qualifying for mortgage loans. FHA aids first-time homebuyers and others who might not be able to qualify for a typical loan by themselves, by providing mortgage insurance to private lenders. Interest rates with an FHA loan usually feature the market interest rate, but the down payment with an FHA loan will be lower than those of conventional loans. Closing costs may be included in the mortgage, while your down payment could be as low as 3 percent of the total.

• VA mortgages

  With a guarantee from the Department of Veterans Affairs, a VA loan is offered to veterens and service people. This special loan requires no down payment, has mimimal closing costs, and offers a competitive rate of interest. While it's true that the mortgages aren't actually provided by the VA, the office verfifies applicants by providing eligibility certificates.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes along with the first. Usually the first mortgage is for 80% of the purchase price and the "piggyback" funds 10%. Instead of the traditional 20 percent down payment, the buyer just has to pull together the remaining 10 percent.

• Carry-Back loans

  In a "carry back" agreement, the seller agrees to loan you some of his own equity to help you get your down payment money. In this scenario, you would borrow the largest portion of the purchase price from a traditional lender and borrow the remaining amount from the seller. Usually this kind of second mortgage will have higher interest.

No matter how you gather your down payment, the satisfaction of reaching the goal of owning your own home will be just as sweet!

Need to talk about down payments? Give us a call at (585) 282-0960.