Your Down Payment

Lots of folks who would like to buy a new home can qualify for a loan, but they can't afford a large down payment. Below are a few methods that will help you put together your down payment

Slash your budget and build up savings. Turn your budget inside out to find extra money to go toward your down payment. You may also decide to enroll in an automatic savings plan to have a portion of your pay automatically transferred into savings. Some effective strategies to save additional funds include moving into less expensive housing, and staying home for your vacation this year.

Work more and sell items you don't need. Look for a second job. This can be exhausting, but the temporary trial can provide your down payment money. You can also seriously consider the possessions you really need and the things you migh be able to put up for sale. A closetful of small items might add up to a nice sum at a garage or tag sale. Also, you can look into selling any investments you hold.

Tap into your retirement funds. Check the provisions of your particular program. You may pull out money from a 401(k) for you down payment or withdraw from an IRA. Be sure to find out about the tax consequences, your obligation for repayment, and any penalties for withdrawing early.

Ask for a gift from family. Many buyers somtimes receive down payment help from caring parents and other family members who are prepared to help get them in their first home. Your family members may be willing to help you reach the milestone of owning your own home.

Learn about housing finance agencies. Provisional mortgage programs are offered to buyers in certain circumstances, such as low income buyers or people planning to improve houses in a specific part of town, among others. Financing with this kind of agency, you may be given an interest rate that is below market, down payment help and other benefits. These kinds of agencies may help you with a lower rate of interest, get you your down payment, and provide other benefits. These non-profit agencies were established to promote community in specific areas.

Find out about low-down and no-down mortgages.

• FHA loans

  The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays a vital role in assisting low and moderate-income buyers get mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA offers mortgage insurance to the private lenders, ensuring the buyers are eligible for a mortgage. Interest rates with an FHA loan are typically the current interest rate, but the down payment for an FHA mortgage will be lower than those of conventional loans. Closing costs might be included in the mortgage, while the down payment might be as low as 3% of the purchase price.

• VA mortgage loans

  With a guarantee from the Department of Veterans Affairs, a VA loan qualifies veterens and service people. This particular loan requires no down payment, has reduced closing costs, and provides a competitive rate of interest. While the VA does not actually finance the mortgages, it does certify eligibility to apply for a VA loan.

• Piggy-back loans

  You may fund your down payment with a second mortgage that closes along with the first. In most cases the first mortgage is for 80% of the purchase price and the "piggyback" funds 10%. Instead of the usual 20 percent down payment, the homebuyer 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 equity. You would finance the largest portion of the purchase price with a traditional mortgage lending institution and borrow the remainder from the seller. Typically you will pay a slightly higher rate with the loan financed by the seller.

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: (818)645-7035.