Your Down Payment
Many borrowers can easily qualify for various loan programs, but they don't have much to put up the standard down payment. Below are a few straightforward methods that will help you get together a down payment
Tighten your belt and save. Be on the look-out for ways you can reduce your expenses to save toward a down payment. You could also try enrolling in an automatic savings plan at your bank to have a percentage of your pay automatically moved into a savings account. You might look into some big expenses in your spending history that you can give up, or reduce, at least temporarily. Here are a couple of examples: you may move into less expensive housing, or stay local for your family vacation.
Work a second job and sell items you do not need. Perhaps you can get an additional job to get your down payment money. In addition, you can make a comprehensive list of things you can sell. Unused gold jewelry can bring a good amount from local jewelry stores. Maybe you have collectibles you can sell on an auction website, or household goods for a tag or garage sale. Also, you might want to look into selling any investments you own.
Borrow from your retirement funds. Research the details for your individual plan. Many people get down payment money by withdrawing what they need from Individual Retirement Accounts or borrowing from their 401(k) programs. You will need to make sure you understand about any penalties, the effect this will have on income taxes, and repayment terms.
Request a gift from your family. First-time buyers are often lucky enough to receive help with their down payment help from caring parents and other family members who may be willing to help get them in their first home. Your family members may be inclined to help you reach the milestone of having your own home.
Research housing finance agencies. Special mortgage loans are given to homebuyers in specific situations, like low income purchasers or future homeowners looking to remodel houses in a particular part of town, among others. With the help of a housing finance agency, you probably will receive a below market interest rate, down payment help and other incentives. These kinds of agencies may help eligible buyers with a lower rate of interest, help with your down payment, and provide other benefits. The main purpose of non-profit housing finance agencies is boosting the purchase of homes in particular parts of the city.
Research no-down and low-down mortgages.
- FHA mortgage loans
The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays a vital role in assisting low to moderate-income families qualify for mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids homebuyers in getting mortgage loans.
FHA offers mortgage insurance to private lenders, enabling buyers who will not qualify for a traditional mortgage, to receive a mortgage.
Down payment sums for FHA mortgages are lower than those of typical mortgage loans, although these loans hold average rates of interest. The required down payment can be as low as 3 percent while the closing costs could be financed in the mortgage.
- VA mortgage loans
VA loans are guaranteed by the Department of Veterans Affairs. Veterens and service people can qualify for a VA loan, which generally offers a low fixed rate of interest, no down payment, and reduced closing costs. While the VA does not actually finance the mortgage loans, it does issue a certificate of eligibility to apply for a VA loan.
- Piggy-back loans
You can finance your down payment through a second mortgage that closes at the same time as the first. In most cases the first mortgage covers 80% of the purchase price and the "piggyback" is for 10%. 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 loan you a portion of his own equity to help you get your down payment funds. You would finance the largest portion of the purchase price with a traditional mortgage lending institution and borrow the remaining amount from the seller. Usually you will pay a somewhat higher rate with the loan financed by the seller.
The satisfaction will be the same, no matter how you manage to come up with your down payment. Your brand new home will be worth it!
Need to talk about the best options for down payments? Give us a call: 4025970500.