Your Down Payment

Many folks who are looking to buy a new house can easily qualify for a mortgage loan, but they don't have a lot of money to put up a down payment. We have a few ideas

Tighten your belt and save. Scrutinize your budget to find extra money to go toward your down payment. There are bank programs in which a portion of your paycheck is automatically deposited into a savings account each pay period. Some effective ways to build up funds include moving into housing that is less expensive, and skipping your family vacation for a year or two.

Sell items you do not need and get a part-time job. Try to find a second job. This can be rough, but the temporary trial can help you get your down payment. You can also get creative about the things you may be able to put up for sale. You may own collectibles you can sell at an online auction, or household items for a tag or garage sale. Also, you can think about selling any investments you hold.

Borrow your down payment from your retirement plan. Explore the details of your individual plan. It is possible to borrow funds from a 401(k) for you down payment or perform a withdrawal from an IRA. You will need to ensure you understand about any penalties, the effect this will have on your taxes, and repayment obligation.

Ask for assistance from family members. First-time buyers somtimes get down payment help from gracious parents and other family members who are prepared to help them get into their first home. Your family members may be pleased to help you reach the milestone of having your first home.

Contact housing finance agencies. These agencies offer provisional loan programs to moderate and low income buyers, buyers with an interest in sprucing up a home in a targeted part of the city, and additional certain kinds of buyers as specified by each agency. Working through this type of agency, you may be given a below market interest rate, down payment assistance and other incentives. Housing finance agencies can help you with a lower interest rate, help with your down payment, and provide other advantages. The principal mission of not-for-profit housing finance agencies is boosting residence ownership in particular areas.

Learn about low-down and no-down mortgage loan programs.

  • FHA loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a vital part in aiding low and moderate-income families qualify for mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA provides mortgage insurance to the private lenders, making the buyers eligible for a home loan. Down payment totals for FHA loans are smaller than those with typical mortgage loans, even though these mortgages have average interest rates. Closing costs can be covered by the mortgage, while your 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 is offered to veterens and service people. This specialized loan does not require a down payment, has reduced closing costs, and provides a competitive interest rate. While the VA doesn't provide the mortgage loans, it does certify eligibility to apply for a VA loan.

  • Piggy-back loans

    You can fund your down payment with a second mortgage that closes along with the first. Most of the time, the piggyback loan takes care of 10 percent of the home's price, and the first mortgage finances 80 percent. The homebuyer pays the remaining 10%, instead of come up with the usual 20% down payment.

  • Carry-Back loans

    In a "carry back" situation, the seller commits to loan you part of his own equity to help you get your down payment funds. In this scenario, you would finance the largest portion of the purchase price with a traditional lender and borrow the remainder from the seller. Typically you will pay a slightly higher rate with the loan from the seller.

No matter how you gather your down payment, the satisfaction of living in your own home will be just as sweet!

Want to discuss the best options for down payments? Give us a call: (401) 583-4150.

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