Your Down Payment

Lots of people who would like to purchase a new home can easily qualify for various loan programs, but they can't afford a large down payment. Below are a few straightforward methods that will help you put together a down payment

Tighten your belt and save. Be on the look-out for ways to trim your monthly expenditures to save toward a down payment. Also, you can look into bank programs through which some of your take-home pay is automatically transferred into savings every pay period. Some effective ways to build up funds include moving into less expensive housing, and staying home for your family vacation for a year or two.

Sell things you don't really need and get a part-time job. Look for an additional job. This can be rough, but the temporary trial can provide your down payment money. Additionally, you can make a comprehensive list of things you can sell. Broken gold jewelry can bring a good price from local jewelers. Multiple small items could add up to a nice sum at a garage or tag sale. Also, you might want to think about selling any investments you own.

Tap into retirement funds. Check the parameters of your specific plan. It is possible to pull out money from a 401(k) plan for a down payment or make a withdrawal from an Individual Retirement Account. Be sure to learn about the tax ramifications, repayment terms, and possible early withdrawal penalties.

Ask for a generous gift from your family. First-time buyers somtimes receive help with their down payment help from caring parents and other family members who may be able to help them get into their first home. Your family members may be pleased to help you reach the goal of owning your first home.

Research housing finance agencies. These types of agencies offer special loan programs for low and moderate-income buyers, buyers with an interest in renovating a residence in a targeted area, and additional specific kinds of buyers as defined by each finance agency. With the help of this type of agency, you may be given a below market interest rate, down payment assistance and other incentives. These kinds of agencies can help you with a lower interest rate, get you your down payment, and provide other assistance. These non-profit agencies were established to build up home ownership in specific neighborhoods.

Find out about low-down and no-down mortgage loans.

• FHA mortgage loans

  The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in aiding low and moderate-income individuals qualify for mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA assists first-time buyers and others who might not be eligible for a conventional mortgage on their own, by offering mortgage insurance to the private lenders. Interest rates with an FHA mortgage are typically the going interest rate, while the down payment requirements for an FHA loan will be lower than those of conventional loans. Closing costs can be covered by the mortgage, and your down payment can be as low as 3% of the total amount.

• VA mortgage loans

  Guaranteed by the Department of Veterans Affairs, a VA loan assists service people and veterans. This specialized loan does not require a down payment, has reduced closing costs, and provides a competitive rate of interest. While it's true that the mortgages 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 you close at the same time as the first. Usually the piggyback loan takes care of 10 percent of the purchase price, while the first mortgage covers 80 percent. The borrower covers the remaining 10%, rather than putting the typical 20% down payment.

• Carry-Back loans

  We a seller carries back a second mortgage, the seller loans you part of his or her equity. You would finance the majority of the purchase price with a traditional mortgage lending institution and borrow the remainder from the seller. Typically you will pay a slightly higher interest rate on the loan financed by the seller.

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

Want to discuss down payments? Give us a call at (818)645-7035.