Your Down Payment

Many folks who are looking to buy a new house can easily qualify for various loan programs, but they can't afford a large down payment. Here's where to get started

Slash the budget and build up savings. Scrutinize the budget to discover extra money to save for your down payment. You also might enroll in an automatic savings plan at your bank to have a portion of your payroll automatically transferred into savings. You would be wise to look into some big expenses in your budget that you can give up, or reduce, at least temporarily. For example, you may decide to move into less expensive housing, or skip a family vacation.

Sell things you do not need and find a part-time job. Perhaps you can find a second job and save your earnings. You can also get creative about the items you migh be able to put up for sale. Multiple small items can add up to a fair amount at a garage or tag sale. Also, you can look into selling any investments you hold.

Borrow from your retirement funds. Explore the specifics for your particular plan. You can take out funds from a 401(k) for a down payment or make a withdrawal from an IRA. Make sure you are clear about any penalties, the effect this could have on your income taxes, and repayment terms.

Ask for a generous gift from family. Many buyers somtimes get help with their down payment help from caring family members who may be anxious to help get them in their first home. Your family members may be eager to help you reach the milestone of owning your own home.

Research housing finance agencies. These types of agencies offer provisional mortgage programs for low and moderate-income borrowers, buyers interested in rehabilitating a residence in a particular part of the city, and additional specific types of buyers as specified by each agency. With the help of this kind of agency, you can receive a below market interest rate, down payment assistance and other incentives. Housing finance agencies can assist eligible homebuyers with a lower interest rate, help with your down payment, and provide other benefits. The primary goal of non-profit housing finance agencies is to boost the purchase of homes in certain places.

Explore no-down and low-down mortgage loan programs.

• Federal Housing Administration (FHA) mortgage loans

  The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in helping low and moderate-income families qualify for mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA assists first-time buyers and others who may not be able to qualify for a conventional mortgage loan on their own, by offering mortgage insurance to private lenders. Down payment requirements for FHA mortgages are less than those with traditional mortgages, even though these loans have average rates of interest. Closing costs may be included in the mortgage, while the down payment might be as low as 3% of the total.

• VA mortgage loans

  VA loans are guaranteed by the U.S. Department of Veterans Affairs. Service persons and veterans can qualify for a VA loan, which usually offers a competitive fixed interest rate, no down payment, and reduced closing costs. While the loans don't originate from the VA, the department verfifies applicants by providing eligibility certificates.

• Piggy-back loans

  A piggy-back loan is a second mortgage that you close with the first. Often the first mortgage is for 80% of the purchase price and the "piggyback" is for 10%. The borrower pays the remaining 10%, instead of come up with the usual 20% down payment.

• Carry-Back loans

  With a carry-back mortgage, the you borrow a portion of the seller's home equity.. The buyer finances the majority of the purchase price through a traditional mortgage program and finances the remaining funds with the seller. Typically you'll pay a somewhat higher interest rate with the loan financed by the seller.

Want to discuss the best options for down payments? Call us: 7184417000.