Putting Together Your Down Payment

Lots of people who are looking to buy a new home qualify for various loan programs, but they don't have much to put up a down payment. Here are a few ways to put together a down payment

Slash your budget and build up savings. Scrutinize your budget to discover extra money to go toward your down payment. There are bank programs through which some of your take-home pay is automatically placed into savings every pay period. Some practical approaches to put together funds include moving into a residence that is less expensive, and staying home for your family vacation for a year or two.

Work a second job and sell things you don't need. Look for a second job. This can be rough, but the temporary difficulty can provide your down payment money. Additionally, you can make an exhaustive list of things you may be able to sell. Unworn gold jewelry can bring a good price from local jewelers. You may own collectibles you can put up for sale at an online auction, or quality household items for a tag or garage sale. You can also research what any investments you hold may bring if sold.

Borrow funds from a retirement plan. Check the parameters of your particular program. Some people get down payment money from withdrawing what they need from Individual Retirement Accounts or borrowing from 401(k) plans. Be sure you comprehend the tax consequences, your obligation for repaying funds, and any penalties for withdrawing early.

Ask for help from generous members of your family. Many buyers are often fortunate enough to receive help with their down payment help from thoughtful parents and other family members who are willing to help get them in their own home. Your family members may be pleased to help you reach the goal of buying your first home.

Learn about housing finance agencies. These types of agencies offer special mortgate loan programs to low and moderate-income homebuyers, buyers interested in remodeling a home within a specific area, and additional specific types of buyers as defined by each finance agency. With the help of this kind of agency, you may be given an interest rate that is below market, down payment assistance and other advantages. These kinds of agencies can assist you with a reduced interest rate, help with your down payment, and offer other advantages. These non-profit programs were formed to build up the value of homes in certain neighborhoods.

Find out about low-down and no-down mortgage loans.

  • FHA mortgages

    The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays a vital part in assisting low to moderate-income individuals qualify for mortgages. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA offers mortgage insurance to private lenders, enabling homebuyers who may not be eligible for a traditional loan, to obtain a mortgage. Down payment sums for FHA loans are less than those of traditional mortgages, although these loans come with average rates of interest. Closing costs can be financed within the mortgage, while your down payment could be as low as 3% of the total amount.

  • VA loans

    With a guarantee from the Department of Veterans Affairs, a VA loan qualifies veterens and service people. This particular loan requires no down payment, has limited closing costs, and provides the advantage of a competitive rate of interest. While the mortgage loans are not actually issued by the VA, the office verfifies borrowers by issuing eligibility certificates.

  • Piggy-back loans

    You can finance a down payment using a second mortgage that closes with the first. In most cases the first mortgage covers 80% of the purchase price and the "piggyback" funds 10%. Instead of the usual 20 percent down payment, the buyer just has to pull together the remaining 10 percent.

  • Carry-Back loans

    In a "carry back" agreement, the seller commits to lend you part of his home equity to help you get your down payment funds. You would finance the largest portion of the purchase price with a traditional lender and borrow the remaining amount from the seller. Typically, this type of second mortgage has higher interest.

The satisfaction will be the same, no matter how you manage to come up with the down payment. Your brand new home will be worth it!

Need to talk about down payment options? Call us at 718-441-7000.

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