Your Down Payment

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Lots of people who would like to purchase a new home qualify for a mortgage loan, but they don't have a large sum of cash to put up the standard down payment. Below are a few ways to put together a down payment

Cut expenses and save. Be on the look-out for ways you can trim your monthly expenses to save toward a down payment. You might also try enrolling in an automatic savings plan to automatically have a predetermined amount from your paycheck deposited into savings. Some effective approaches to put together funds include moving into less expensive housing, and staying home for your family vacation this year.

Sell items you do not need and get a second job. Try to get an additional job. This can be rough, but the temporary trial can help you get your down payment. Additionally, you can put together an exhaustive inventory of things you can sell. Unused gold jewelry can bring a good amount from local jewelry stores. Maybe you have desirable items you can put up for sale at an online auction, or household items for a tag or garage sale. Also, you might want to look into selling any investments you hold.

Tap into retirement funds. Explore the details for your particular plan. You can borrow funds from a 401(k) plan for you down payment or make a withdrawal from an IRA. Make sure to find out about the tax ramifications, your obligation for repaying the money, and possible penalties for withdrawing early.

Request a generous gift from your family. Many buyers are sometimes fortunate enough to receive help with their down payment assistance from thoughtful parents and other family members who are prepared to help them get into their own home. Your family members may be pleased to help you reach the milestone of owning your own home.

Research housing finance agencies. Special mortgage loans are provided to buyers in certain circumstances, such as low income purchasers or homebuyers looking to improve homes in a targeted place, among others. Financing through this kind of agency, you probably will get a below market interest rate, down payment assistance and other advantages. Housing finance agencies can help you with a reduced rate of interest, help with your down payment, and offer other benefits. These non-profit agencies to promote the value of homes in certain areas.

Learn about low-down and no-down mortgage loans.

  • Federal Housing Administration (FHA) loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in aiding low to moderate-income Americans qualify for mortgage loans. 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, ensuring the buyers are eligible for a mortgage loan. Down payment amounts for FHA loans are lower than those of typical mortgage loans, although these loans come with average interest rates. Closing costs may be financed within the mortgage, and your down payment can be as low as 3 percent of the total.

  • VA mortgages

    Guaranteed by the Department of Veterans Affairs, a VA loan qualifies service people and veterans. This special loan requires no down payment, has reduced closing costs, and offers a competitive interest rate. Although the VA doesn't actually issue the loans, it does issue a certificate of eligibility to apply for a VA mortgage.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that you close with the first. Generally the piggyback loan takes care of 10 percent of the purchase price, and the first mortgage covers 80 percent. The borrower pays the remaining 10%, instead of putting the typical 20% down payment.

  • Carry-Back loans

    With a carry-back mortgage, the seller loans you part of his or her home equity. In this scenario, you would finance the majority of the purchase price with a traditional mortgage lending institution and finance the remainder with the seller. Usually this kind of second mortgage has a higher rate of interest.

The feeling of accomplishment will be the same, no matter how you manage to get together your down payment. Your new home will be worth it!
Need to talk about the best options for down payments? Give us a call: 201-998-9050.

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