Your Down Payment
Lots of borrowers qualify for several different kinds of mortgages, but they can't afford a large down payment. Below are a few straightforward methods that will help you get together your down payment
Cut expenses and save. Look for ways you can reduce your monthly expenses to put away money for a down payment. You might also decide to enroll in an automatic savings plan at your bank to automatically have a specific portion of your paycheck moved into a savings account. You could look into some big expenses in your spending history that you can give up, or trim, at least temporarily. For example, you might move into less expensive housing, or stay local for your annual vacation.
Sell things you don't need and find a part-time job. Look for an additional job. This can be exhausting, but the temporary trial can help you get your down payment. In addition, you can put together an exhaustive inventory of things you may be able to sell. Broken gold jewelry can be sold at local jewelry stores. Maybe you own desirable items you can sell on an online auction, or quality household goods for a garage or tag sale. Also, you can look into selling any investments you hold.
Borrow money from your retirement plan. Check the parameters of your specific program. Many homebuyers get down payment money from withdrawing what they need from Individual Retirement Accounts or getting funds out of their 401(k) programs. Make sure you understand the tax ramifications, your obligation for repaying funds, and early withdrawal penalties.
Ask for help from family members. First-time buyers are sometimes lucky enough to receive down payment assistance from giving family members who may be able to help them get into their first home. Your family members may be willing to help you reach the milestone of buying your own home.
Research housing finance agencies. These agencies provide special loan programs to low and moderate-income homebuyers, buyers with an interest in remodeling a house in a specific part of the city, and other specific types of buyers as specified by each finance agency. With the help of a housing finance agency, you probably will receive a below market interest rate, down payment help and other perks. Housing finance agencies may help you with a reduced rate of interest, help with your down payment, and offer other benefits. These non-profit programs exist to boost the value of homes in specific places.
Explore no-down and low-down mortgage loans.
- Federal Housing Administration (FHA) mortgages
The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in helping low to moderate-income Americans qualify for mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals who wish to qualify for mortgages.
FHA provides mortgage insurance to the private lenders, ensuring the buyers are eligible for a mortgage.
Down payment sums for FHA mortgages are less than those for traditional mortgage loans, although these loans have average interest rates. The required down payment can go as low as 3 percent and the closing costs can be covered by the mortgage.
- VA mortgages
VA loans are guaranteed by the U.S. Department of Veterans Affairs. Service persons and veterans can get a VA loan, which generally offers a low interest rate, no down payment, and limited closing costs. Although the VA does not actually provide the loans, it does certify eligibility to apply for a VA mortgage.
- Piggy-back loans
You may fund your down payment with a second mortgage that closes with the first. Usually the piggyback loan is for 10 percent of the home's amount, while the first mortgage covers 80 percent. The homebuyer pays the remaining 10%, instead of having to put together the usual 20% down payment.
- Carry-Back loans
In a "carry back" situation, the seller agrees to lend you a portion of his own equity to help you with your down payment money. You would borrow the largest portion of the purchase price from a traditional lender and finance the remaining amount with the seller. Typically, this type of second mortgage has higher interest.
The satisfaction will be the same, no matter how you manage to get together the down payment. Your brand new home will be your reward!
Need to talk about down payment options? Call us: (786) 262-6486.