Building Your Down Payment

Lots of folks who are looking to purchase a new home can qualify for several different kinds of mortgages, but they can't afford a large down payment. Get started here

Tighten your belt and save. Be on the look-out for ways to trim your expenditures to put away money for a down payment. You also could enroll in an automatic savings plan to have a percentage of your payroll automatically transferred into your savings account. Some effective strategies to build up funds include moving into housing that is less expensive, and skipping your family vacation for a year or two.

Work a second job and sell items you don't need. Perhaps you can find an additional job to get your down payment money. You can also seriously consider the possessions you really need and the things you migh be able to put up for sale. A closetful of small things might add up to a nice sum at a garage or tag sale. Also, you might want to look into selling any investments you own.

Borrow from retirement funds. Research the details of your individual plan. You may pull out money from a 401(k) plan for you down payment or perform a withdrawal from an IRA. Make sure you understand about any penalties, the effect this could have on taxes, and repayment terms.

Ask for a gift from family. Many buyers are sometimes lucky enough to get down payment help from giving family members who are prepared to help them get into their own home. Your family members may be eager to help you reach the milestone of buying your own home.

Contact housing finance agencies. Provisional mortgage loans are provided to homebuyers in specific situations, such as low income buyers or homebuyers looking to remodel houses in a particular area, among others. With the help of a housing finance agency, you probably will receive a below market interest rate, down payment help and other incentives. These kinds of agencies can assist eligible buyers with a reduced rate of interest, get you your down payment, and provide other benefits. These non-profit agencies to promote the value of homes in particular places.

Explore no-down and low-down mortgage loans.

• FHA mortgages

  The Federal Housing Administration (FHA), which is inside the U.S. Department of Housing and Urban Development (HUD), plays an important part in aiding low and moderate-income individuals get mortgages. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA helps first-time buyers and others who may not be eligible for a traditional mortgage loan on their own, by offering mortgage insurance to lenders. Interest rates with an FHA loan generally feature the market interest rate, but the down payment requirements with an FHA loan will be smaller than those of conventional loans. Closing costs can be financed within the mortgage, and your down payment could be as low as 3% of the total amount.

• VA mortgage loans

  VA loans are backed by the U.S. Department of Veterans Affairs. Service persons and veterans are eligible for a VA loan, which typically offers a low fixed rate of interest, no down payment, and limited closing costs. Although the VA does not provide the loans, it does certify eligibility to qualify for a VA loan.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes along with the first. Usually the piggyback loan takes care of 10 percent of the home's amount, while the first mortgage covers 80 percent. In contrast to the traditional 20 percent down payment, the homebuyer just has to cover the remaining 10 percent.

• Carry-Back loans

  We a seller carries back a second mortgage, the you borrow a portion of the seller's home equity.. The buyer finances most of the purchase price with a traditional mortgage program and borrows the remaining funds from the seller. Typically you will pay a somewhat higher interest rate on the loan from the seller.

Want to discuss the best options for down payments? Give us a call at 9162758775.