Putting Together Your Down Payment

Lots of borrowers can qualify for several different kinds of mortgages, but they don't have a lot of cash to pay the standard down payment. Do you want to buy a new home, but don't know how to put together your down payment?

Slash the budget and build up savings. Scrutinize your budget to discover ways you can cut expenses to go toward your down payment. You also might enroll in an automatic savings plan to have a percentage of your payroll automatically transferred into savings. Some practical ways to save additional funds include moving into less expensive housing, and staying local for your vacation for a year or two.

Sell items you don't really need and find a part-time job. Try to get a second job. This can be exhausting, but the temporary trial can help you get your down payment. You can also seriously consider the possessions you really need and the things you can sell. You might have collectibles you can put up for sale on an online auction, or household items for a tag or garage sale. Also, you might want to consider selling any investments you own.

Tap into retirement funds. Investigate the provisions of your particular program. It is possible to take out funds from a 401(k) plan for a down payment or withdraw from an IRA. Be sure you comprehend the tax ramifications, your obligation for repayment, and any early withdrawal penalties.

Ask for assistance from members of your family. First-time buyers somtimes receive down payment help from gracious family members who may be willing to help get them in their own home. Your family members may be inclined to help you reach the goal of owning your first home.

Research housing finance agencies. Special mortgage loans are extended to buyers in certain circumstances, like low income homebuyers or homebuyers planning to renovating homes in a particular neighborhood, among others. Financing through a housing finance agency, you can receive a below market interest rate, down payment assistance and other advantages. These kinds of agencies may assist you with a reduced interest rate, help with your down payment, and provide other assistance. These non-profit programs exist to boost home ownership in particular areas.

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

• FHA mortgage loans

  The Federal Housing Administration (FHA), which is inside the U.S. Department of Housing and Urban Development (HUD), plays an important role in assisting low to moderate-income Americans qualify for mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA provides mortgage insurance to the private lenders, enabling homebuyers who will not be eligible for a typical mortgage, to obtain a mortgage. Interest rates with an FHA loan normally feature the current interest rate, while the down payment requirements with an FHA mortgage will be less than those of conventional loans. Closing costs might be covered by the mortgage, and the down payment might be as low as 3% of the total.

• VA loans

  VA loans are guaranteed by the U.S. Department of Veterans Affairs. Veterens and service people can get a VA loan, which usually offers a reasonable interest rate, no down payment, and reduced closing costs. While the loans aren't actually provided by the VA, the department verfifies borrowers by issuing eligibility certificates.

• Piggy-back loans

  You may fund your down payment using a second mortgage that closes at the same time as the first. Generally the piggyback loan is for 10 percent of the purchase amount, and the first mortgage finances 80 percent. Rather than the traditional 20 percent down payment, the buyer just has to pull together the remaining 10 percent.

• Carry-Back loans

  We a seller carries back a second mortgage, the seller loans you part of his or her home equity. You would finance the largest portion of the purchase price with a traditional lending institution and borrow the remaining amount from the seller. Typically you'll pay a somewhat higher rate with the loan from the seller.

No matter your method of getting together your down payment funds, the thrill of owning your own home will be just as sweet!

Want to discuss the best options for down payments? Call us at 714-970-9700.