Your Down Payment

Many folks who are looking to purchase a new house can qualify for a mortgage loan, but they don't have a lot of money to put up the standard down payment. Below are a few straightforward methods that will help you put together a down payment

Tighten your belt and save. Be on the look-out for ways to trim your monthly expenses to save toward a down payment. There are bank programs in which some of your paycheck is automatically deposited into a savings account every pay period. Some effective methods to build up funds include moving into less expensive housing, and staying home for your family vacation for a year or two.

Work more and sell items you don't need. Try to find an additional job. This can be rough, but the temporary trial can help you get your down payment. Additionally, you can put together a comprehensive list of items you can sell. Unused gold jewelry can bring a good price from local jewelry stores. You might have desirable items you can put up for sale on an online auction, or household items for a garage or tag sale. Also, you might want to think about selling any investments you own.

Tap into your retirement funds. Check the provisions of your particular plan. It is possible to take out funds from a 401(k) plan for you down payment or make a withdrawal from an IRA. You will need to ensure you understand about any penalties, the way this will affect on your taxes, and repayment obligation.

Request a gift from family. First-time buyers somtimes get help with their down payment assistance from caring parents and other family members who are prepared to help get them in their own home. Your family members may be pleased to help you reach the goal of owning your first home.

Research housing finance agencies. Special mortgage programs are provided to buyers in certain circumstances, such as low income purchasers or people planning to renovating homes in a specific part of town, among others. Financing through a housing finance agency, you may get an interest rate that is below market, down payment help and other benefits. These types of agencies may help you with a lower rate of interest, help with your down payment, and provide other advantages. The primary purpose of non-profit housing finance agencies is boosting the purchase of homes 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 an important role in aiding low and moderate-income Americans get mortgage loans. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA provides mortgage insurance to private lenders, ensuring the buyers are eligible for a loan. Interest rates for an FHA loan normally feature the market interest rate, while the down payment for an FHA mortgage will be below those of conventional loans. The down payment may be as low as 3 percent while the closing costs might be included in the mortgage loan.

• VA loans

  VA loans are guaranteed by the Department of Veterans Affairs. Service persons and veterans can get a VA loan, which generally offers a reasonable fixed interest rate, no down payment, and reduced closing costs. While the VA doesn't actually finance the mortgage loans, it does certify eligibility to apply for a VA mortgage.

• Piggy-back loans

  You may fund a down payment with a second mortgage that closes with the first. Generally the piggyback loan is for 10 percent of the purchase price, while the first mortgage finances 80 percent. The borrower pays the remaining 10%, instead of putting the typical 20% down payment.

• Carry-Back loans

  With a carry-back mortgage, the seller loans you part of his or her equity. You would finance the largest portion of the purchase price with a traditional lending institution and finance the remainder with the seller. Often, this form of second mortgage will have higher interest.

Need to talk about your down payment? Give us a call: 9162758775.