Your Down Payment
Lots of folks who are looking to buy a new house qualify for various loan programs, but they don't have much to pay the standard down payment. Below are a few straightforward ways to put together your down payment
Tighten your belt and save. Be on the look-out for ways you can trim your expenditures to set aside money for a down payment. You could also try enrolling in an automatic savings plan to have a portion of your pay automatically moved into your savings account. You would be wise to look into some big expenses in your spending history that you can give up, or reduce, at least temporarily. For example, you may decide to move into less expensive housing, or skip a family vacation.
Work more and sell items you do not need. Maybe you can get an additional job and save your earnings. In addition, you can make a comprehensive list of items you may be able to sell. Unused gold jewelry can be sold at local jewelers. Maybe you have collectibles you can sell at an online auction, or household goods for a tag or garage sale. You can also research what any investments you have could bring if sold.
Borrow money from a retirement plan. Research the details for your individual plan. Many people get down payment money by withdrawing funds from their Individual Retirement Accounts or getting funds out of 401(k) plans. Make sure you are clear about any penalties, the way this could affect on income taxes, and repayment obligation.
Ask for help from members of your family. Many homebuyers are sometimes lucky enough to receive down payment help from giving family members who are prepared to help get them in their first home. Your family members may be pleased at the chance to help you reach the goal of having your own home.
Research housing finance agencies. These agencies provide special mortgage programs for low and moderate-income homebuyers, buyers interested in remodeling a residence in a particular area, and additional groups as specified by the agency. With the help of this type of agency, you may receive an interest rate that is below market, down payment help and other incentives. Housing finance agencies may assist eligible buyers with a reduced interest rate, get you your down payment, and provide other assistance. The primary goal of not-for-profit housing finance agencies is to boost residential ownership in particular areas.
Explore no-down and low-down mortgages.
- Federal Housing Administration (FHA) mortgages
The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a vital part in assisting low to moderate-income Americans qualify for mortgages. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get
FHA helps first-time homebuyers and others who may not be eligible for a conventional loan on their own, by providing mortgage insurance to the lenders.
Down payment amounts for FHA mortgages are below those with conventional mortgages, even though these loans hold average rates of interest. The required down payment may be as low as 3 percent while the closing costs may be financed in the mortgage.
- VA mortgages
With a guarantee from the Department of Veterans Affairs, a VA loan assists service people and veterans. This specialized loan does not require a down payment, has reduced closing costs, and provides a competitive rate of interest. Although the VA doesn't actually issue the mortgage loans, it does issue a certificate of eligibility to qualify for a VA loan.
- Piggy-back loans
You can fund your down payment with a second mortgage that closes with the first. Usually the piggyback loan takes care of 10 percent of the purchase amount, and the first mortgage covers 80 percent. In contrast to the traditional 20 percent down payment, the buyer just has to cover the remaining 10 percent.
- Carry-Back loans
In a "carry back" situation, the seller agrees to lend you part of his home equity to help you get your down payment money. The buyer finances the highest percentage of the purchase price with a traditional mortgage program and finances the remaining funds with the seller. Typically you will pay a somewhat higher rate with the loan financed by the seller.
The satisfaction will be the same, no matter which approach you use to come up with your down payment. Your new home will be your reward!
Need to talk about your down payment? Call us at (772) 252-6724.