Your Down Payment

Many people who are looking to purchase a new home qualify for a mortgage loan, but they can't afford a large down payment. Want to buy a new house, but aren't sure how to put together a down payment?

Slash the budget and build up savings. Turn your budget upside-down to find extra money to save for your down payment. There are bank programs through which a portion of your take-home pay is automatically placed into a savings account each pay period. You would be wise to look into some big expenses in your spending history that you can give up, or reduce, at least temporarily. For example, you might decide to move into less expensive housing, or stay local for your vacation.

Work a second job and sell things you don't need. Maybe you can get an additional job and build up your earnings. Additionally, you can make a comprehensive inventory of items you can sell. Unworn gold jewelry can be sold at local jewelers. You might own desirable items you can put up for sale at an auction website, or household goods for a tag or garage sale. You can also look into what your investments could bring if sold.

Borrow from retirement funds. Investigate the parameters of your retirement plan. Many homebuyers get down payment money by withdrawing from Individual Retirement Accounts or getting money out of their 401(k) plans. Make sure you understand the tax consequences, your obligation for repayment, and penalties for withdrawing early.

Ask for a gift from family. First-time buyers are sometimes fortunate enough to get down payment help from gracious family members who may be prepared to help them get into their own home. Your family members may be inclined to help you reach the milestone of owning your first home.

Contact housing finance agencies. These types of agencies provide provisional mortgage loans to low and moderate-income homebuyers, buyers interested in remodeling a house in a particular part of the city, and additional groups as defined by the finance agency. Working through a housing finance agency, you can be given a below market interest rate, down payment assistance and other perks. These types of agencies may assist eligible buyers with a lower interest rate, get you your down payment, and offer other benefits. These non-profit agencies to promote community in particular areas.

Research no-down and low-down mortgage loans.

• Federal Housing Administration (FHA) mortgages

  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 Americans get mortgage loans. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA provides mortgage insurance to private lenders, ensuring the buyers are eligible for a loan. Down payment sums for FHA mortgages are less than those with typical mortgages, although these loans come with current interest rates. The required down payment may be as low as three percent while the closing costs could be financed in the mortgage loan.

• VA mortgage loans

  VA loans are backed by the U.S. Department of Veterans Affairs. Service persons and veterans can receive a VA loan, which usually offers a competitive interest rate, no down payment, and reduced closing costs. Even though the mortgages are not actually financed by the VA, the office verfifies applicants by issuing eligibility certificates.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes at the same time as the first. Most of the time, the piggyback loan is for 10 percent of the purchase amount, while the first mortgage covers 80 percent. In contrast to the traditional 20 percent down payment, the homebuyer will just have to pull together the remaining 10 percent.

• Carry-Back loans

  With a carry-back mortgage, the you borrow a portion of the seller's home equity.. You would finance the majority of the purchase price with a traditional mortgage lending institution and finance the remainder with the seller. Generally, this form of second mortgage has higher interest.

Want to discuss the best options for down payments? Give us a call: 866-300-1550.