Your Down Payment

Lots of buyers qualify for several different kinds of mortgages, but they don't have a large sum of cash to put up the standard down payment. Do you want to buy a new house, but don't know how you should get together your down payment?

Tighten your belt and save. Be on the look-out for ways to trim your monthly expenditures to set aside money for a down payment. Also, you can look into bank programs through which a portion of your paycheck is automatically placed into a savings account every pay period. Some practical ways to save additional funds include moving into less expensive housing, and skipping a year's vacation.

Work a second job and sell items you do not need. Perhaps you can get a second job to get your down payment money. You can also get serious about the possessions you actually need and the items you may be able to put up for sale. A closetful of small items might add up to a fair amount at a garage or tag sale. You can also explore what your investments will bring if sold.

Borrow funds from a retirement plan. Research the specifics of your individual plan. Some homebuyers get down payment money by withdrawing from IRAs or borrowing from 401(k) plans. Make sure to ask your plan representative about the tax ramifications, your obligation for repaying funds, and any penalties for withdrawing early.

Ask for help from members of your family. Many homebuyers somtimes get down payment help from giving family members who may be eager to help get them in their own home. Your family members may be eager to help you reach the milestone of owning your own home.

Learn about housing finance agencies. Special loan programs are provided to buyers in certain situations, like low income purchasers or buyers planning to renovating homes in a particular neighborhood, among others. Financing through a housing finance agency, you can receive an interest rate that is below market, down payment help and other perks. Housing finance agencies may help eligible homebuyers with a reduced rate of interest, help with your down payment, and offer other benefits. The main purpose of non-profit housing finance agencies is to promote residence ownership in certain parts of the city.

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

• FHA mortgage loans

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in helping low and moderate-income families qualify for mortgage loans. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA aids first-time buyers and others who might not be able to qualify for a traditional mortgage on their own, by offering mortgage insurance to the lenders. Interest rates with an FHA loan generally feature the market interest rate, but the down payment for an FHA mortgage will be smaller than those of conventional loans. Closing costs can be included in the mortgage, while the down payment might be as low as 3% of the total amount.

• VA loans

  VA loans are guaranteed by the Department of Veterans Affairs. Veterens and service people can receive a VA loan, which generally offers a reasonable fixed interest rate, no down payment, and limited closing costs. Even though the VA does not actually finance the mortgages, it does certify eligibility to apply for a VA mortgage.

• Piggy-back loans

  A piggy-back loan is a second mortgage that you close at the same time as the first. Generally the piggyback loan takes care of 10 percent of the home's amount, while the first mortgage covers 80 percent. The borrower covers the remaining 10%, rather than putting the usual 20% down payment.

• Carry-Back loans

  In the case of the seller "carrying back a second mortgage," the you borrow part of the seller's home equity.. The buyer finances most of the purchase price through a traditional mortgage program and finances the remaining funds with the seller. Typically you will pay a somewhat higher interest rate with the loan financed by the seller.

No matter your method of getting together down payment money, the thrill of reaching the goal of owning your own home will be just as great!

Need to talk about down payment options? Give us a call at 7184417000.