Your Down Payment
Many borrowers qualify for a mortgage loan, but they don't have a lot of cash to pay a down payment. Here are a few ways to get together your down payment
Cut expenses and save. Look for ways you can trim your monthly expenditures to set aside funds for a down payment. Also, you can look into bank programs in which a portion of your paycheck is automatically deposited into a savings account each pay period. You could look into some big expenses in your spending history that you can give up, or trim, at least temporarily. For example, you might move into less expensive housing, or skip a vacation.
Sell items you don't need and get a second job. Perhaps you can get an additional job to get your down payment money. Additionally, you can put together a comprehensive list of things you can sell. Unused gold jewelry can be sold at local jewelry stores. You might have desirable items you can put up for sale at an auction website, or quality household items for a garage or tag sale. Also, you might want to consider selling any investments you own.
Borrow from a retirement plan. Investigate the parameters of your retirement program. You can pull out funds from a 401(k) for you down payment or withdraw from an IRA. Be sure you understand the tax consequences, your obligation for repaying funds, and possible penalties for withdrawing early.
Request a gift from family. Many homebuyers are often fortunate enough to get help with their down payment help from thoughtful parents and other family members who are able to help them get into their first home. Your family members may be pleased at the chance to help you reach the goal of having your first home.
Research housing finance agencies. Special mortgage programs are provided to homebuyers in specific situations, such as low income purchasers or people looking to renovating homes in a certain place, among others. With the help of a housing finance agency, you can get an interest rate that is below market, down payment help and other incentives. Housing finance agencies may help you with a reduced interest rate, get you your down payment, and provide other benefits. The principal purpose of non-profit housing finance agencies is to promote residence ownership in particular parts of the city.
Research no-down and low-down mortgage loan programs.
- FHA mortgage loans
The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a significant part in assisting low and moderate-income families get mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals in getting mortgage loans.
FHA offers mortgage insurance to private lenders, ensuring the buyers are eligible for a loan.
Interest rates for an FHA loan normally feature the going interest rate, while the down payment with an FHA mortgage are less than those of conventional loans. The required down payment may be as low as 3 percent while the closing costs could be included in the mortgage.
- VA mortgages
Guaranteed by the Department of Veterans Affairs, a VA loan qualifies veterens and service people. This particular loan requires no down payment, has mimimal closing costs, and provides a competitive rate of interest. Although the mortgages don't originate from the VA, the department verfifies applicants by issuing eligibility certificates.
- Piggy-back loans
You can finance a down payment using a second mortgage that closes with the first. Generally the first mortgage covers 80% of the purchase price and the "piggyback" is for 10%. Instead of the usual 20 percent down payment, the homebuyer will just have to cover 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 borrow the majority of the purchase price from a traditional mortgage lender and finance the remainder with the seller. Typically you'll pay a slightly higher rate on the loan from the seller.
The feeling of accomplishment will be the same, no matter how you manage to get together your down payment. Your new home will be your reward!
Want to discuss your down payment? Call us: 972-932-9083.