Your Down Payment
Many people who are looking to purchase a new house can qualify for a loan, but they can't afford a large down payment. Do you want to look into getting a new home, but don't know how you should put together a down payment?
Tighten your belt and save. Look for ways you can reduce your monthly expenditures to put away money for a down payment. You could also try enrolling in an automatic savings plan to have a portion of your payroll automatically moved into a savings account. You would be wise to look into some big expenses in your spending history that you can live without, or trim, at least temporarily. For example, you might decide to move into less expensive housing, or stay local for your vacation.
Sell things you don't really need and get a part-time job. Try to find a second job. This can be rough, but the temporary difficulty can provide your down payment money. In addition, you can put together a comprehensive inventory of items you may be able to sell. Unworn gold jewelry can be sold at local jewelry stores. Maybe you own desirable items you can put up for sale on an online auction, or household goods for a garage or tag sale. Also, you might want to think about selling any investments you own.
Borrow money from a retirement plan. Check the provisions of your specific plan. It is possible to take out funds from a 401(k) for you down payment or withdraw from an Individual Retirement Account. Make sure you comprehend the tax consequences, repayment terms, and any penalties for withdrawing early.
Request a gift from your family. Many homebuyers somtimes receive help with their down payment help from thoughtful parents and other family members who may be anxious to help them get into their own home. Your family members may be willing to help you reach the milestone of having your own home.
Learn about housing finance agencies. These agencies provide special mortgage programs to moderate and low income borrowers, buyers interested in remodeling a residence in a targeted part of the city, and additional certain types of buyers as specified by each finance agency. With the help of a housing finance agency, you probably will get a below market interest rate, down payment assistance and other perks. Housing finance agencies can help eligible buyers with a lower rate of interest, help with your down payment, and provide other advantages. These non-profit agencies were formed to build up home ownership in specific areas.
Explore no-down and low-down mortgages.
- FHA mortgages
The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in aiding low to moderate-income families get mortgage loans. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get
FHA helps first-time buyers and others who would not be able to qualify for a conventional mortgage by themselves, by providing mortgage insurance to lenders.
Interest rates with an FHA mortgage are usually the going interest rate, while the down payment for an FHA loan are lower than those of conventional loans. Closing costs can be financed in the mortgage, and the down payment can be as low as 3 percent of the purchase price.
- VA loans
VA loans are backed by the U.S. Department of Veterans Affairs. Veterens and service people can receive a VA loan, which usually offers a low rate of interest, no down payment, and limited closing costs. Even though the VA does not actually provide the loans, it does issue a certificate of eligibility to qualify for a VA loan.
- Piggy-back loans
You can fund your down payment using a second mortgage that closes with the first. Most of the time, the first mortgage covers 80% of the purchase amount and the "piggyback" funds 10%. The homebuyer pays the remaining 10%, rather than come up with 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 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. Typically you'll pay a somewhat higher interest rate on the loan from the seller.
No matter how you gather your down payment, the thrill of reaching the goal of living in your own home will be just as great!
Want to discuss the best options for down payments? Call us at 4078987559.