Building Your Down Payment

Many borrowers qualify for various loan programs, but they can't afford a large down payment. We have a few ideas

Reduce expenses and save. Be on the look-out for ways to reduce your expenditures to put away money for a down payment. You could also try enrolling in an automatic savings plan to automatically have a specific portion of your take-home pay moved into savings. You might look into some big expenses in your budget that you can do without, or trim, at least temporarily. For example, you may move into less expensive housing, or skip a family vacation.

Sell things you don't really need and get a second job. Look for a second job. This can be rough, but the temporary difficulty can provide your down payment money. You can also get serious about the possessions you actually need and the things you can put up for sale. You may have collectibles you can put up for sale at an auction website, or quality household goods for a tag or garage sale. Also, you can look into selling any investments you hold.

Borrow from your retirement funds. Investigate the provisions of your particular plan. Many homebuyers get down payment money from withdrawing from Individual Retirement Accounts or borrowing from their 401(k) plans. Be sure you know about any penalties, the way this will affect on taxes, and repayment obligation.

Ask for help from generous family members. Many homebuyers somtimes get down payment assistance from thoughtful family members who are prepared to help get them in their first home. Your family members may be pleased to help you reach the goal of having your first home.

Research housing finance agencies. These types of agencies provide provisional mortgage programs to moderate and low income borrowers, buyers interested in remodeling a home in a particular part of the city, and other groups as defined by each finance agency. Working through a housing finance agency, you may receive an interest rate that is below market, down payment help and other advantages. Housing finance agencies can help you with a lower interest rate, help with your down payment, and offer other advantages. The main purpose of non-profit housing finance agencies is to promote residence ownership in certain places.

Explore no-down and low-down mortgage loans.

• Federal Housing Administration (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 aiding low to moderate-income buyers qualify for mortgage loans. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids homebuyers in getting mortgage loans. FHA offers mortgage insurance to the private lenders, enabling homebuyers who will not be eligible for a typical mortgage, to get a mortgage. Down payment requirements for FHA loans are smaller than those of typical mortgage loans, even though these loans come with current rates of interest. Closing costs might be included in the mortgage, and the down payment could be as low as 3 percent of the purchase price.

• VA mortgages

  With a guarantee from the Department of Veterans Affairs, a VA loan qualifies veterens and service people. This specialized loan does not require a down payment, has reduced closing costs, and provides a competitive interest rate. Even though the mortgages are not actually provided by the VA, the department certifies borrowers by providing eligibility certificates.

• Piggy-back loans

  You can finance a down payment using a second mortgage that closes at the same time as the first. Generally the piggyback loan is for 10 percent of the home's price, and the first mortgage finances 80 percent. In contrast to the usual 20 percent down payment, the buyer will just have to cover the remaining 10 percent.

• Carry-Back loans

  With a carry-back mortgage, the seller loans you part of his or her equity. In this scenario, you would finance the majority of the purchase price with a traditional mortgage lender and finance the remainder with the seller. Usually you will pay a somewhat higher rate with the loan financed by the seller.

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

Need to talk about your down payment? Call us: 4054206125.