Putting Together Your Down Payment

Lots of buyers qualify for several different kinds of mortgages, but they don't have a lot of money to pay the standard down payment. Here are a few straightforward ways to get together your down payment

Reduce expenses and save. Look for ways to reduce your expenditures to save toward a down payment. Also, you can look into bank programs in which some of your take-home pay is automatically transferred into a savings account every pay period. You might look into some big expenses in your spending history that you can give up, or trim, at least temporarily. For example, you may decide to move into less expensive housing, or stay local for your vacation.

Sell items you don't need and find a part-time job. Try to find a second job. This can be exhausting, but the temporary difficulty can provide your down payment money. You can also seriously consider the possessions you really need and the things you can put up for sale. A closetful of small items might add up to a nice sum at a garage or tag sale. Also, you might want to think about selling any investments you own.

Tap into your retirement funds. Research the details for your individual plan. You may pull out funds from a 401(k) plan for a down payment or withdraw from an IRA. You will need to ensure you know about any penalties, the way this will affect on your income taxes, and repayment obligation.

Ask for assistance from generous family members. Many buyers somtimes receive help with their down payment help from caring family members who are eager to help them get into their own home. Your family members may be inclined to help you reach the milestone of having your own home.

Contact housing finance agencies. These agencies extend provisional mortgage loans to low and moderate-income borrowers, buyers with an interest in renovating a home within a specific area, and other groups as specified by the finance agency. With the help of a housing finance agency, you can get an interest rate that is below market, down payment assistance and other advantages. These kinds of agencies can assist you with a reduced rate of interest, get you your down payment, and offer other assistance. These non-profit programs were established to boost home ownership in certain neighborhoods.

Learn about low-down and no-down mortgages.

• Federal Housing Administration (FHA) loans

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a critical role in assisting low to moderate-income buyers 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, helping the buyers to become eligible for a mortgage loan. Interest rates with an FHA loan usually feature the going interest rate, but the down payment requirements for an FHA mortgage will be smaller than those of conventional loans. The required down payment can be as low as 3 percent and the closing costs can be financed in the mortgage loan.

• VA mortgage loans

  VA loans are guaranteed by the Department of Veterans Affairs. Service persons and veterans can qualify for a VA loan, which typically offers a reasonable rate of interest, no down payment, and limited closing costs. Even though the VA does not actually provide the mortgages, it does certify eligibility to apply for a VA mortgage.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes at the same time as the first. Usually the piggyback loan is for 10 percent of the home's amount, and the first mortgage finances 80 percent. The borrower pays the remaining 10%, instead of having to put together the usual 20% down payment.

• Carry-Back loans

  We a seller carries back a second mortgage, the you borrow part of the seller's home equity.. The buyer funds most of the purchase price with a traditional mortgage program and finances the remaining funds with the seller. Generally, this type of second mortgage has a higher rate of interest.

No matter your strategy of pulling together down payment money, the satisfaction of living in your own home will be just as great!

Want to discuss down payment options? Call us at 425-508-9988.