Your Down Payment

Lots of people who are looking to purchase a new house can easily qualify for various loan programs, but they can't afford a large down payment. Want to look into getting a new house, but don't know how to get together a down payment?

Slash the budget and build up savings. Be on the look-out for ways to reduce your expenditures to save toward a down payment. You might also decide to enroll in an automatic savings plan at your bank to have a portion of your pay automatically moved into your savings account. Some practical ways to save additional funds include moving into less expensive housing, and skipping a year's vacation.

Sell items you do not need and get a second job. Try to find a second job. This can be exhausting, but the temporary difficulty can help you get your down payment. You can also get creative about the things you can put up for sale. A closetful of small things could add up to a nice sum at a garage or tag sale. Also, you might want to consider selling any investments you own.

Borrow money from a retirement plan. Investigate the provisions of your specific plan. Some homebuyers get down payment money from withdrawing from their Individual Retirement Accounts or borrowing from their 401(k) plans. Make sure you know about any penalties, the effect this will have on taxes, and repayment obligation.

Ask for a gift from your family. Many homebuyers somtimes get down payment help from caring family members who are able to help get them in their own home. Your family members may be inclined to help you reach the milestone of buying your own home.

Learn about housing finance agencies. These agencies provide special mortgage loans for moderate and low income homebuyers, buyers interested in remodeling a house in a particular area, and other specific types of buyers as defined by the agency. Working with this type of agency, you probably will be given an interest rate that is below market, down payment assistance and other perks. Housing finance agencies can help you with a reduced interest rate, get you your down payment, and provide other assistance. These non-profit programs exist to build up home ownership in particular places.

Research 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 an important part in assisting low and moderate-income families qualify for mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids homebuyers who wish to get mortgages. FHA offers mortgage insurance to private lenders, enabling buyers who may not be eligible for a typical loan, to receive a mortgage. Down payment requirements for FHA mortgages are less than those with typical mortgage loans, although these mortgages have average rates of interest. The required down payment can go as low as three percent and the closing costs could be financed in the mortgage.

• VA mortgage loans

  Guaranteed by the Department of Veterans Affairs, a VA loan qualifies service people and veterans. This specialized loan requires no down payment, has limited closing costs, and offers a competitive interest rate. While the loans are not actually provided by the VA, the department verfifies applicants by issuing eligibility certificates.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes along with the first. Usually the piggyback loan is for 10 percent of the purchase amount, and the first mortgage covers 80 percent. The borrower pays the remaining 10%, instead of needing to put together the usual 20% down payment.

• Carry-Back loans

  With a carry-back mortgage, the you borrow part of the seller's home equity.. You would borrow the largest portion of the purchase price from a traditional lending institution and finance the remaining amount with the seller. Typically you will pay a slightly higher rate on the loan financed by the seller.

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

Want to discuss down payments? Call us: 9162758775.