Building Your Down Payment

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Many folks who would like to buy a new home can qualify for various loan programs, but they can't afford a large down payment. Here are a few ways to put together a down payment

Reduce expenses and save. Turn your budget inside out to uncover extra money to go toward your down payment. You could also try enrolling in an automatic savings plan to have a percentage of your pay automatically transferred into a savings account. Some practical approaches to build up funds include moving into less expensive housing, and skipping a year's vacation.

Work more and sell things you don't need. Maybe you can find a second job to get your down payment money. In addition, you can put together a comprehensive list of things you may be able to sell. Broken gold jewelry can be sold at local jewelers. You might own desirable items you can put up for sale on an online auction, or household goods for a tag or garage sale. Also, you can look into selling any investments you hold.

Borrow your down payment from your retirement plan. Explore the specifics for your individual plan. Many people get down payment money by withdrawing funds from their Individual Retirement Accounts or taking money out of 401(k) plans. Be sure you are knowledgeable about any penalties, the way this could affect on taxes, and repayment obligation.

Ask for help from family members. Many buyers are sometimes fortunate enough to get help with their down payment help from caring family members who may be able to help get them in their first home. Your family members may be pleased to help you reach the goal of buying your own home.

Contact housing finance agencies. Provisional mortgage programs are offered to homebuyers in certain situations, like low income buyers or future homeowners planning to renovating houses in a particular part of town, among others. Financing through a housing finance agency, you may receive a below market interest rate, down payment help and other benefits. These types of agencies may help you with a lower interest rate, help with your down payment, and provide other advantages. These non-profit agencies to boost community in certain areas.

Research no-down and low-down mortgage loans.

  • Federal Housing Administration (FHA) mortgage loans

    The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in aiding low to moderate-income Americans get mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers in qualifying for mortgages. FHA offers mortgage insurance to the private lenders, ensuring the buyers are eligible for a loan. Down payment requirements for FHA loans are lower than those for typical mortgage loans, although these mortgages hold average interest rates. The required down payment can be as low as three percent and the closing costs could be financed in the mortgage loan.

  • VA loans

    Guaranteed by the Department of Veterans Affairs, a VA loan assists veterans and service people. This special loan requires no down payment, has limited closing costs, and offers a competitive rate of interest. While it's true that the mortgage loans don't originate from the VA, the office certifies applicants by providing eligibility certificates.

  • Piggy-back loans

    You may fund a down payment with a second mortgage that closes along with the first. Generally the first mortgage covers 80% of the purchase price and the "piggyback" funds 10%. In contrast to the traditional 20 percent down payment, the buyer just has to cover the remaining 10 percent.

  • Carry-Back loans

    In the case of the seller "carrying back a second mortgage," the you borrow a portion of the seller's home equity.. You would finance the largest portion of the purchase price with a traditional mortgage lender and borrow the remaining amount from the seller. Usually you'll pay a somewhat higher interest rate on the loan financed by the seller.

No matter how you gather your down payment, the thrill of living in your own home will be just as sweet!

Want to discuss down payment options? Call us: 303.840.7424.