Your Down Payment

Lots of folks who would like to purchase a new house can qualify for various loan programs, but they can't afford a large down payment. Here are a few straightforward methods that will help you get together your down payment

Tighten your belt and save. Turn your budget upside-down to discover ways you can cut expenses to go toward your down payment. Also, you can look into bank programs through which some of your take-home pay is automatically deposited into savings every pay period. Some effective strategies to build up funds include moving into less expensive housing, and skipping your vacation for a year or two.

Sell items you do not really 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 things you can put up for sale. Multiple small items can add up to a nice sum at a garage or tag sale. Also, you can consider selling any investments you hold.

Borrow from your retirement funds. Investigate the provisions of your specific program. Many homebuyers get down payment money by withdrawing from their Individual Retirement Accounts or getting money out of their 401(k) programs. Be sure you understand the tax consequences, repayment terms, and possible early withdrawal penalties.

Ask for assistance from family members. Many buyers somtimes receive down payment assistance from caring parents and other family members who may be willing to help them get into their own home. Your family members may be inclined to help you reach the milestone of having your first home.

Learn about housing finance agencies. Provisional mortgate loan programs are given to buyers in certain circumstances, such as low income purchasers or buyers planning to remodel houses in a specific place, among others. With the help of a housing finance agency, you may receive a below market interest rate, down payment assistance and other benefits. Housing finance agencies may help you with a lower interest rate, help with your down payment, and provide other benefits. These non-profit programs to promote home ownership in certain places.

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

• Federal Housing Administration (FHA) loans

  The Federal Housing Administration (FHA), which is inside the U.S. Department of Housing and Urban Development (HUD), plays a critical role in assisting low and moderate-income Americans qualify for mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA offers mortgage insurance to private lenders, enabling new homebuyers who will not be eligible for a typical mortgage loan, to get financing. Down payment sums for FHA loans are smaller than those of typical mortgages, although these mortgages hold average rates of interest. Closing costs might be included in the mortgage, while the down payment can be as low as 3.5 percent of the purchase price.

• VA mortgage loans

  With a guarantee from the Department of Veterans Affairs, a VA loan qualifies veterens and service people. This particular loan does not require a down payment, has reduced closing costs, and provides a competitive rate of interest. While the VA does not issue the mortgages, it does certify eligibility to qualify for a VA mortgage.

• Piggy-back loans

  You can finance a down payment through a second mortgage that closes with the first. In most cases the first mortgage is for 80% of the purchase amount and the "piggyback" funds 10%. In contrast to the traditional 20 percent down payment, the homebuyer just has to cover the remaining 10 percent.

• 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 largest portion of the purchase price with a traditional lending institution and finance the remaining amount with the seller. Typically you will pay a somewhat higher rate with the loan from the seller.

Need to talk about your down payment? Call us: (317) 288-9434.