Your Down Payment

Lots of buyers can qualify for several different kinds of mortgages, but they can't afford a large down payment. Below are a few straightforward ways to get together a down payment

Tighten your belt and save. Scrutinize your budget to find ways you can cut expenses to go toward your down payment. You also might enroll in an automatic savings plan at your bank to automatically have a predetermined amount from your take-home pay moved into a savings account. Some effective ways to save additional funds include moving into less expensive housing, and skipping your family vacation for a year or two.

Work a second job and sell things you do not need. Perhaps you can find a second job to get your down payment money. You can also get creative about the things you may be able to sell. You may own desirable items you can put up for sale on an auction website, or quality household goods for a garage or tag sale. Also, you can consider selling any investments you own.

Borrow your down payment from your retirement plan. Explore the specifics of your individual plan. You may take out money from a 401(k) plan for a down payment or make a withdrawal from an IRA. Make sure you understand about any penalties, the way this will affect on income taxes, and repayment obligation.

Request a generous gift from family. Many homebuyers somtimes get down payment assistance from thoughtful parents and other family members who may be willing to help them get into their own home. Your family members may be happy at the chance to help you reach the milestone of owning your own home.

Research housing finance agencies. These types of agencies provide special mortgage programs to low and moderate-income buyers, buyers with an interest in sprucing up a residence within a specific part of the city, and other certain kinds of buyers as specified by the agency. Financing through this kind of agency, you probably will receive a below market interest rate, down payment help and other perks. Housing finance agencies can assist you with a reduced interest rate, help with your down payment, and provide other benefits. The central purpose of non-profit housing finance agencies is to boost residential ownership in particular places.

Explore no-down and low-down mortgage loan programs.

  • FHA mortgages

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a critical role in aiding low and moderate-income buyers get mortgage loans. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA assists first-time homebuyers and others who would not be eligible for a typical loan by themselves, by offering mortgage insurance to the lenders. Interest rates for an FHA mortgage usually feature the going interest rate, while the down payment amounts with an FHA mortgage will be less than those of conventional loans. The down payment can be as low as three percent and the closing costs can be covered by the mortgage loan.

  • VA mortgages

    With a guarantee from the Department of Veterans Affairs, a VA loan qualifies veterens and service people. This special loan does not require a down payment, has reduced closing costs, and provides a competitive rate of interest. Even though the VA does not issue the mortgages, it does issue a certificate of eligibility to qualify for a VA mortgage.

  • Piggy-back loans

    You can fund a down payment using a second mortgage that closes at the same time as the first. Often the first mortgage is for 80% of the purchase price and the "piggyback" is for 10%. The homebuyer covers the remaining 10%, instead of putting the typical 20% down payment.

  • Carry-Back loans

    In the case of the seller "carrying back a second mortgage," the seller loans you part of his or her home equity. You would borrow the largest portion of the purchase price from a traditional lender and finance the remaining amount with the seller. Often, this type of second mortgage will have higher interest.

No matter your method of putting together your down payment money, the thrill of reaching the goal of living in your own home will be just as sweet!

Need to talk about down payment options? Give us a call at 310-379-5997.

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