Your Down Payment
Many buyers qualify for various loan programs, but they can't afford a large down payment. Here are a few ideas:
Reduce expenses and save. Be on the look-out for ways to reduce your expenditures to save toward a down payment. There are bank programs through which some of your paycheck is automatically placed into a savings account every pay period. You might look into some big expenses in your budget that you can live without, or reduce, at least temporarily. For example, you might move into less expensive housing, or stay local for your vacation.
Sell items you don't really need and get a second job. Try to get a second job. This can be rough, but the temporary trial can help you get your down payment. You can also get serious about the possessions you actually need and the things you could be able to put up for sale. Multiple small items could add up to a nice sum at a garage or tag sale. You can also look into what your investments may bring if sold.
Borrow money from a retirement plan. Explore the details of your particular plan. You can borrow funds from a 401(k) plan for you down payment or withdraw from an IRA. Make sure you are knowledgable about any penalties, the way this may affect on your taxes, and repayment obligation.
Ask for help from members of your family. First-time buyers somtimes get down payment help from gracious parents and other family members who may be anxious to help get them in their first home. Your family members may be inclined to help you reach the milestone of owning your first home.
Research housing finance agencies. Provisional loan programs are extended to homebuyers in specific circumstances, such as low income buyers or future homeowners looking to remodel houses in a particular part of town, among others. With the help of this kind of agency, you may get an interest rate that is below market, down payment help and other benefits. These types of agencies may help eligible buyers with a reduced rate of interest, help with your down payment, and offer other advantages. These non-profit programs were established to promote home ownership in specific places.
Research no-down and low-down mortgage loans.
- Federal Housing Administration (FHA) mortgage loans
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 buyers qualify for mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get
FHA assists first-time homebuyers and others who may not be eligible for a typical mortgage on their own, by offering mortgage insurance to lenders.
Down payment totals for FHA mortgages are less than those with conventional mortgages, although these mortgages come with average rates of interest. Closing costs may be included in the mortgage, and your down payment may be as low as 3 percent of the total.
- VA loans
With a guarantee from the Department of Veterans Affairs, a VA loan is offered to veterens and service people. This special loan does not require a down payment, has mimimal closing costs, and provides the advantage of a competitive rate of interest. Even though the VA does not finance the loans, it does certify eligibility to qualify for a VA mortgage.
- Piggy-back loans
You can fund a down payment through a second mortgage that closes with the first. Usually the piggyback loan takes care of 10 percent of the home's amount, and the first mortgage finances 80 percent. The borrower covers the remaining 10%, instead of needing to put together the usual 20% down payment.
- 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 majority of the purchase price with a traditional lender and borrow the remaining amount from the seller. Usually this kind of second mortgage has a higher rate of interest.
No matter how you gather down payment money, the satisfaction of living in your own home will be just as great!
Want to discuss down payments? Call us at 714-970-9700.