Your Down Payment

Many borrowers can easily qualify for various loan programs, but they don't have a lot of money to put up a down payment. Here are a few tips:

Slash your budget and build up savings. Look for ways you can reduce your monthly expenditures to set aside money for a down payment. You might also try enrolling in an automatic savings plan at your bank to have a portion of your payroll automatically transferred into savings. You might look into some big expenses in your spending history that you can give up, or trim, at least temporarily. Here are a couple of examples: you may move into less expensive housing, or skip a vacation.

Sell items you don't really need and get a second job. Look for an additional job. This can be exhausting, but the temporary trial can provide your down payment money. Additionally, you can put together an exhaustive list of items you may be able to sell. Unworn gold jewelry can be sold at local jewelry stores. Maybe you own desirable items you can put up for sale at an auction website, or quality household items for a garage or tag sale. You might also look into what your investments may bring if sold.

Borrow funds from a retirement plan. Check the provisions of your particular program. You can take out money from a 401(k) plan for you down payment or withdraw from an IRA. You will want to make sure you understand about any penalties, the effect this may have on taxes, and repayment obligation.

Ask for help from members of your family. First-time homebuyers somtimes get down payment assistance from thoughtful family members who may be prepared to help them get into their first home. Your family members may be inclined to help you reach the milestone of owning your own home.

Research housing finance agencies. These types of agencies provide provisional loan programs for moderate and low income buyers, buyers with an interest in remodeling a home in a particular area, and other groups as specified by each agency. With the help of a housing finance agency, you can receive an interest rate that is below market, down payment help and other advantages. Housing finance agencies can assist you with a reduced rate of interest, help with your down payment, and offer other advantages. The central goal of not-for-profit housing finance agencies is promoting residence ownership in particular parts of the city.

Find out about low-down and no-down mortgage loan programs.

• FHA mortgages

  The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in assisting low and moderate-income buyers get mortgages. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids homebuyers in qualifying for mortgage loans. FHA provides mortgage insurance to private lenders, enabling new homebuyers who may not be eligible for a conventional loan, to obtain financing. Down payment sums for FHA loans are less than those of traditional mortgage loans, even though these mortgages hold average interest rates. The required down payment may go as low as three percent and the closing costs might be included in the mortgage.

• VA loans

  VA loans are guaranteed by the Department of Veterans Affairs. Veterens and service people can get a VA loan, which typically offers a competitive rate of interest, no down payment, and reduced closing costs. While it's true that the loans don't originate from the VA, the office certifies applicants by issuing eligibility certificates.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes with the first. Usually the first mortgage covers 80% of the purchase price and the "piggyback" is for 10%. The homebuyer covers the remaining 10%, rather than having to put together the typical 20% down payment.

• Carry-Back loans

  In a "carry back" situation, the seller agrees to loan you part of his home equity to help you get your down payment money. The buyer finances the majority of the purchase price with a traditional mortgage program and borrows the remaining funds from the seller. Often, this form of second mortgage has a higher rate of interest.

No matter how you gather your down payment, the thrill of reaching the goal of living in your own home will be just as great!

Need to talk about your down payment? Call us at 2813708282.