Your Down Payment

Lots of buyers qualify for various loan programs, but they can't afford a large down payment. Do you want to look into getting a new house, but don't know how you should get together a down payment?

Slash the budget and build up savings. Turn your budget inside out to uncover ways you can cut expenses to go toward your down payment. There are bank programs through which some of your paycheck is automatically placed into savings every pay period. You might look into some big expenses in your spending history that you can do without, or reduce, at least temporarily. Here are a couple of examples: you might decide to move into less expensive housing, or skip a family vacation.

Work more and sell things you don't need. Maybe you can find a second job to get your down payment money. Additionally, you can put together a comprehensive inventory of things you may be able to sell. Unused gold jewelry can be sold at local jewelry stores. A closetful of small items may add up to a fair amount at a garage or tag sale. Also, you can think about selling any investments you hold.

Borrow funds from your retirement plan. Investigate the provisions of your particular program. Some homebuyers get down payment money by withdrawing what they need from Individual Retirement Accounts or borrowing from 401(k) programs. You will need to ensure you know about any penalties, the way this could affect on your income taxes, and repayment obligation.

Ask for a generous gift from your family. First-time homebuyers are sometimes lucky enough to receive help with their down payment help from caring parents and other family members who may be willing to help them get into their own home. Your family members may be eager to help you reach the goal of buying your own home.

Contact housing finance agencies. Provisional loan programs are offered to homebuyers in certain situations, like low income buyers or homebuyers planning to renovating houses in a specific area, among others. With the help of this kind of agency, you probably will receive an interest rate that is below market, down payment help and other incentives. These kinds of agencies may assist eligible buyers with a lower rate of interest, help with your down payment, and offer other benefits. These non-profit agencies to promote community in certain places.

Research no-down and low-down mortgages.

• FHA mortgages

  The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in assisting low and moderate-income families get mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA offers mortgage insurance to private lenders, ensuring the buyers are eligible for a loan. Interest rates with an FHA loan usually feature the going interest rate, while the down payment for an FHA mortgage are below those of conventional loans. The down payment may go as low as 3 percent and the closing costs might be covered by the mortgage.

• VA loans

  VA loans are backed by the U.S. Department of Veterans Affairs. Veterens and service people qualify for a VA loan, which typically offers a reasonable rate of interest, no down payment, and minimal closing costs. While the VA does not actually issue the mortgages, it does certify eligibility to qualify for a VA loan.

• Piggy-back loans

  You can finance a down payment using a second mortgage that closes with the first. Most of the time, the piggyback loan takes care of 10 percent of the home's amount, while the first mortgage covers 80 percent. The homebuyer covers the remaining 10%, instead of needing to pull together the usual 20% down payment.

• Carry-Back loans

  In a "carry back" agreement, the seller agrees to lend you a piece of his own equity to help you with your down payment funds. The buyer funds the majority of the purchase price through a traditional mortgage program and finances the remaining funds with the seller. Usually you'll pay a slightly higher rate with the loan financed by the seller.

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

Want to discuss your down payment? Give us a call: (818)645-7035.