Your Down Payment

Many people who are looking to buy a new house can qualify for several different kinds of mortgages, but they can't afford a large down payment. Here's where you start

Tighten your belt and save. Be on the look-out for ways to trim your expenses to set aside funds for a down payment. Also, you can look into bank programs in which some of your take-home pay is automatically deposited into savings each pay period. Some practical strategies to save additional funds include moving into a residence that is less expensive, and staying local for your family vacation for a year or two.

Sell items you do not really need and find a part-time job. Maybe you can find an additional job and save your earnings. In addition, you can make an exhaustive list of things you may be able to sell. Broken gold jewelry can bring a good amount from local jewelers. You may own desirable items you can put up for sale on an online auction, or quality household goods for a tag or garage sale. You could also look into what any investments you own could sell for.

Borrow funds from a retirement plan. Research the specifics of your particular plan. Many homebuyers get down payment money by withdrawing from Individual Retirement Accounts or borrowing from 401(k) plans. Be sure you understand the tax ramifications, repayment terms, and possible penalties for withdrawing early.

Ask for assistance from members of your family. First-time homebuyers somtimes get help with their down payment help from thoughtful parents and other family members who are prepared to help them get into their first home. Your family members may be inclined to help you reach the goal of having your first home.

Research housing finance agencies. These types of agencies offer provisional mortgage loans to low and moderate-income borrowers, buyers with an interest in sprucing up a home within a specific part of the city, and additional groups as defined by the finance agency. Working with this type of agency, you probably will be given an interest rate that is below market, down payment assistance and other benefits. Housing finance agencies may assist eligible buyers with a lower rate of interest, help with your down payment, and provide other assistance. The principal mission of non-profit housing finance agencies is boosting the purchase of homes in targeted areas.

Research no-down and low-down mortgages.

• FHA mortgage loans

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a significant role in assisting low to moderate-income buyers qualify for mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA aids first-time buyers and others who may not be eligible for a conventional mortgage loan on their own, by providing mortgage insurance to private lenders. Interest rates with an FHA loan typically feature the going interest rate, but the down payment for an FHA loan will be below those of conventional loans. Closing costs can be financed within the mortgage, while your down payment could be as low as 3 percent of the total amount.

• VA mortgages

  VA loans are guaranteed by the Department of Veterans Affairs. Veterens and service people can receive a VA loan, which generally offers a competitive fixed rate of interest, no down payment, and minimal closing costs. Although the VA doesn't actually issue the mortgage loans, it does issue a certificate of eligibility to apply for a VA loan.

• Piggy-back loans

  A piggy-back loan is a second mortgage that you close at the same time as the first. Generally the piggyback loan is for 10 percent of the home's amount, and the first mortgage covers 80 percent. Instead of the usual 20 percent down payment, the homebuyer will just have to cover the remaining 10 percent.

• Carry-Back loans

  We a seller carries back a second mortgage, the you borrow a portion of the seller's home equity.. The buyer funds the highest percentage of the purchase price through a traditional mortgage program and borrows the remaining funds from the seller. Often, this form of second mortgage has a higher rate of interest.

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

Need to talk about your down payment? Call us: 866-300-1550.