Putting Together Your Down Payment
Lots of folks who are looking to purchase a new house qualify for several different kinds of mortgages, but they don't have a lot of money to put up a down payment. Below are a few methods that will help you get together a down payment
Slash your budget and build up savings. Scrutinize your budget to discover extra money to save for your down payment. There are bank programs through which some of your take-home pay is automatically placed into savings each pay period. You might look into some big expenses in your spending history that you can live without, or trim, at least temporarily. Here are a couple of examples: you might move into less expensive housing, or stay close to home for your family vacation.
Work a second job and sell things you do not need. Perhaps you can find a second job and build up your earnings. Additionally, you can make a comprehensive inventory of items you may be able to sell. Broken gold jewelry can be sold at local jewelers. You may own collectibles you can sell on an online auction, or household goods for a tag or garage sale. Also, you might want to look into selling any investments you hold.
Tap into your retirement funds. Explore the specifics for your individual plan. Some homebuyers get down payment money from withdrawing funds from their IRAs or borrowing from their 401(k) plans. Be sure you know about any penalties, the way this could affect on your taxes, and repayment terms.
Ask for help from generous family members. Many homebuyers somtimes get down payment assistance from gracious family members who are prepared to help them get into their own home. Your family members may be inclined to help you reach the goal of owning your own home.
Research housing finance agencies. Special mortgage programs are given to buyers in certain circumstances, like low income homebuyers or homebuyers looking to improve homes in a targeted place, among others. With the help of this type of agency, you may be given an interest rate that is below market, down payment assistance and other advantages. Housing finance agencies can assist eligible homebuyers with a lower rate of interest, help with your down payment, and provide other assistance. These non-profit agencies exist to build up the value of homes in specific areas.
Learn about low-down and no-down mortgage loans.
- 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 to moderate-income individuals qualify for mortgage loans. Part of the United States 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 traditional mortgage loan on their own, by offering mortgage insurance to the private lenders.
Interest rates with an FHA loan are typically the going interest rate, but the down payment amounts with an FHA loan will be lower than those of conventional loans. The down payment can be as low as three percent while the closing costs could be included in the mortgage.
- VA loans
VA loans are guaranteed by the Department of Veterans Affairs. Veterens and service people can receive a VA loan, which usually offers a low fixed interest rate, no down payment, and reduced closing costs. Although the VA doesn't issue the mortgages, 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 closes along with the first. Most of the time, the piggyback loan takes care of 10 percent of the home's amount, while the first mortgage covers 80 percent. Rather than the usual 20 percent down payment, the buyer just has to cover the remaining 10 percent.
- Carry-Back loans
In a "carry back" agreement, the seller agrees to lend you a piece of his home equity to help you with your down payment money. The buyer finances most of the purchase price with a traditional mortgage program and borrows the remainder from the seller. Generally, this form of second mortgage will have a higher rate of interest.
The satisfaction will be the same, no matter which method you use to get together your down payment. Your new home will be your reward!
Want to discuss your down payment? Give us a call: (772) 252-6724.