Your Down Payment

Many buyers qualify for several different kinds of mortgages, but they can't afford a large down payment. Here are a few straightforward ways to get together your down payment

Cut expenses and save. Be on the look-out for ways to trim your monthly expenses to put away money for a down payment. There are bank programs through which some of your paycheck is automatically placed into savings every pay period. You might look into some big expenses in your budget that you can give up, or trim, at least temporarily. Here are a couple of examples: you may decide to move into less expensive housing, or stay local for your annual vacation.

Sell things you don't need and get a part-time job. Try to get an additional job. This can be exhausting, but the temporary trial can provide your down payment money. You can also seriously consider the possessions you really need and the items you can sell. A closetful of small things could add up to a nice sum at a garage or tag sale. You might also explore what any investments you own will sell for.

Borrow from your retirement plan. Explore the specifics of your individual plan. It is possible to borrow funds from a 401(k) plan for you down payment or get a withdrawal from an IRA. Make sure to ask your plan representative about the tax ramifications, repayment terms, and penalties for withdrawing early.

Request a gift from family. First-time homebuyers somtimes receive help with their down payment help from thoughtful family members who are able to help them get into their own home. Your family members may be willing to help you reach the milestone of buying your first home.

Research housing finance agencies. These types of agencies provide special loan programs for low and moderate-income borrowers, buyers interested in rehabilitating a residence in a specific area, and other certain types of buyers as defined by each finance agency. Financing through this type of agency, you may be given a below market interest rate, down payment assistance and other advantages. Housing finance agencies may help you with a lower interest rate, help with your down payment, and offer other benefits. The main purpose of not-for-profit housing finance agencies is build up the purchase of homes in targeted places.

Find out about low-down and no-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 assisting low and moderate-income individuals get mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers who need to get mortgages. FHA aids first-time homebuyers and others who may not be able to qualify for a typical loan by themselves, by offering mortgage insurance to private lenders. Down payment amounts for FHA mortgages are smaller than those of typical mortgage loans, even though these loans have current interest rates. Closing costs may be covered by the mortgage, while your down payment could be as low as 3% of the total.

• VA mortgage loans

  Guaranteed by the Department of Veterans Affairs, a VA loan is offered to service people and veterans. This specialized loan requires no down payment, has reduced closing costs, and provides the benefit of a competitive interest rate. While the mortgages don't originate from the VA, the office certifies borrowers by issuing eligibility certificates.

• Piggy-back loans

  You can fund a down payment with a second mortgage that closes with the first. Most of the time, the piggyback loan is for 10 percent of the home's price, and the first mortgage covers 80 percent. In contrast to the usual 20 percent down payment, the buyer just has to cover the remaining 10 percent.

• Carry-Back loans

  In a "carry back" agreement, the seller agrees to loan you a piece of his home equity to help you get your down payment funds. You would borrow the majority of the purchase price from a traditional mortgage lender and finance the remainder with the seller. Typically you'll pay a somewhat higher rate on the loan financed by the seller.

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

Need to talk about the best options for down payments? Call us: 425-508-9988.