Putting Together Your Down Payment

Many borrowers can easily qualify for various loan programs, but they can't afford a large down payment. Below are a few methods that will help you put together a down payment

Cut expenses and save. Look for ways you can reduce your monthly expenditures to set aside money for a down payment. Also, you can look into bank programs through which some of your paycheck is automatically transferred into savings every pay period. You could look into some big expenses in your budget that you can live without, or reduce, at least temporarily. For example, you might move into less expensive housing, or stay close to home for your annual vacation.

Sell items you don't really need and get a second job. Maybe you can get a second job to get your down payment money. You can also get serious about the possessions you really need and the items you may be able to sell. Multiple small items can add up to a fair amount at a garage or tag sale. Also, you might want to look into selling any investments you own.

Tap into retirement funds. Explore the specifics for your individual plan. You can borrow money from a 401(k) plan for you down payment or get a withdrawal from an IRA. Be sure to learn about the tax consequences, repayment terms, and any early withdrawal penalties.

Ask for assistance from family members. Many homebuyers are often lucky enough to receive help with their down payment help from gracious family members who are anxious to help get them in their own home. Your family members may be pleased to help you reach the goal of owning your own home.

Contact housing finance agencies. These types of agencies offer special mortgate loan programs- for moderate and low income homebuyers, buyers interested in rehabilitating a house within a particular area, and additional groups as specified by the agency. With the help of a housing finance agency, you probably will be given an interest rate that is below market, down payment assistance and other incentives. These types of agencies can help you with a reduced rate of interest, help with your down payment, and provide other benefits. The central mission of not-for-profit housing finance agencies is boosting the purchase of homes in targeted parts of the city.

Explore no-down and low-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 a vital role in helping low and moderate-income buyers get mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA provides mortgage insurance to the private lenders, enabling new homebuyers who may not be eligible for a traditional mortgage, to get a mortgage. Down payment amounts for FHA mortgages are less than those of typical mortgage loans, although these mortgages hold average interest rates. Closing costs can be financed within the mortgage, while your down payment may be as low as 3 percent of the total amount.

• VA loans

  Guaranteed by the Department of Veterans Affairs, a VA loan is offered to veterens and service people. This special loan does not require a down payment, has reduced closing costs, and provides a competitive interest rate. Although the mortgage loans don't originate from the VA, the department certifies applicants by providing eligibility certificates.

• Piggy-back loans

  You can fund your down payment with a second mortgage that closes at the same time as the first. Generally the first mortgage is for 80% of the cost of the home and the "piggyback" funds 10%. The borrower pays the remaining 10%, instead of come up with 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 finances most of the purchase price through a traditional mortgage program and finances the remaining funds with the seller. Generally, this kind of second mortgage will have higher interest.

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