Your Down Payment
Many borrowers qualify for various loan programs, but they can't afford a large down payment. Here are a few ideas:
Reduce expenses and save. Turn your budget inside out to discover extra money to save for your down payment. You could also try enrolling in an automatic savings plan at your bank to have a percentage of your payroll automatically transferred into your savings account. Some practical approaches to save additional funds include moving into a residence that is less expensive, and staying home for your vacation for a year or two.
Sell items you do not need and find a second job. Look for a second job. This can be rough, but the temporary trial can provide your down payment money. You can also seriously consider the possessions you really need and the items you migh be able to put up for sale. Maybe you own collectibles you can put up for sale at an auction website, or quality household items for a garage or tag sale. Also, you might want to look into selling any investments you hold.
Borrow from your retirement funds. Research the details of your individual plan. Some people get down payment money from withdrawing from their IRAs or taking funds out of their 401(k) plans. Be sure to ask your plan representative about the tax ramifications, your obligation for repaying funds, and any early withdrawal penalties.
Ask for help from generous members of your family. Many buyers are often lucky enough to receive help with their down payment assistance from caring family members who are able to help get them in their own home. Your family members may be pleased to help you reach the milestone of having your own home.
Learn about housing finance agencies. These types of agencies extend provisional mortgate loan programs to low and moderate-income homebuyers, buyers with an interest in remodeling a home within a targeted part of the city, and additional groups as defined by the agency. Working through a housing finance agency, you probably will receive an interest rate that is below market, down payment help and other advantages. Housing finance agencies can help eligible buyers with a reduced rate of interest, help with your down payment, and provide other assistance. These non-profit programs were formed to promote the value of homes in particular places.
Research no-down and low-down mortgage loan programs.
- Federal Housing Administration (FHA) mortgages
The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in helping low and moderate-income buyers qualify for mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get
FHA aids first-time homebuyers and others who might not be eligible for a conventional mortgage by themselves, by offering mortgage insurance to private lenders.
Down payment amounts for FHA mortgages are less than those of traditional mortgages, although these loans hold current rates of interest. Closing costs might be included in the mortgage, while the down payment might be as low as 3 percent of the total.
- VA mortgages
With a guarantee from the Department of Veterans Affairs, a VA loan is offered to veterens and service people. This particular loan does not require a down payment, has limited closing costs, and offers a competitive rate of interest. While the VA doesn't actually issue the mortgages, it does issue a certificate of eligibility to qualify for a VA mortgage.
- Piggy-back loans
A piggy-back loan is a second mortgage that closes at the same time as the first. Usually the first mortgage is for 80% of the cost of the home and the "piggyback" is for 10%. The borrower pays the remaining 10%, rather than come up with the usual 20% down payment.
- Carry-Back loans
In a "carry back" mortgage, the seller agrees to loan you a portion of his home equity to help you with your down payment money. The buyer finances most of the purchase price through a traditional mortgage program and finances the remaining funds with the seller. Typically, this form of second mortgage has a higher rate of interest.
No matter how you gather your down payment funds, the thrill of living in your own home will be just as great!
Need to talk about down payment options? Give us a call: (772) 252-6724.