Putting Together Your Down Payment

Lots of folks who are looking to purchase a new house qualify for a loan, but they don't have a lot of money to pay a down payment. Below are a few methods that will help you get together your down payment

Slash your budget and build up savings. Turn your budget upside-down to find extra money to save for your down payment. You also might enroll in an automatic savings plan at your bank to have a portion of your payroll automatically moved into a savings account. Some effective methods to save additional funds include moving into a residence that is less expensive, and skipping a year's vacation.

Sell things you don't need and get a part-time job. Maybe you can find a second job to get your down payment money. Additionally, you can make an exhaustive list of items you can sell. Unused gold jewelry can bring a good price from local jewelry stores. Maybe you have collectibles you can put up for sale on an auction website, or quality household items for a garage or tag sale. Also, you can consider selling any investments you hold.

Tap into your retirement funds. Explore the details for your individual plan. Many homebuyers get down payment money by withdrawing from their IRAs or borrowing from 401(k) programs. You will need to make sure you understand about any penalties, the way this will affect on taxes, and repayment terms.

Ask for assistance from generous members of your family. First-time homebuyers somtimes receive help with their down payment assistance from gracious family members who may be anxious to help them get into their own home. Your family members may be pleased to help you reach the milestone of having your first home.

Research housing finance agencies. Special mortgate loan programs are offered to buyers in certain circumstances, such as low income purchasers or buyers planning to renovating homes in a specific area, among others. With the help of this type of agency, you probably will get a below market interest rate, down payment help and other advantages. Housing finance agencies can assist you with a reduced interest rate, help with your down payment, and provide other assistance. The principal goal of not-for-profit housing finance agencies is to promote the purchase of homes in particular areas.

Research no-down and low-down mortgages.

• Federal Housing Administration (FHA) loans

  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 and moderate-income Americans qualify for mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA helps first-time homebuyers and others who may not be eligible for a typical mortgage on their own, by offering mortgage insurance to lenders. Down payment totals for FHA loans are smaller than those of typical mortgage loans, even though these loans come with current interest rates. The down payment may be as low as 3 percent while the closing costs might be financed in the mortgage.

• VA mortgages

  With a guarantee from the Department of Veterans Affairs, a VA loan assists service people and veterans. This particular loan requires no down payment, has mimimal closing costs, and provides the benefit of a competitive rate of interest. While the mortgage loans don't originate from the VA, the department verfifies borrowers by issuing eligibility certificates.

• Piggy-back loans

  You may fund a down payment through a second mortgage that closes with the first. Usually the piggyback loan is for 10 percent of the purchase amount, and the first mortgage finances 80 percent. The borrower covers the remaining 10%, instead of putting the usual 20% down payment.

• Carry-Back loans

  We a seller carries back a second mortgage, the seller loans you part of his or her equity. In this scenario, you would finance the largest portion of the purchase price with a traditional lender and finance the remaining amount with the seller. Typically you will pay a somewhat higher rate on the loan from the seller.

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

Need to talk about down payments? Call us at 720-598-8300.