Your Down Payment
Lots of borrowers can qualify for various loan programs, but they don't have much to put up the standard down payment. Do you want to buy a new house, but don't know how you should get together a down payment?
Reduce expenses and save. Scrutinize the budget to discover ways you can cut expenses to save for your down payment. Also, you can look into bank programs in which some of your paycheck is automatically transferred into savings every pay period. You could look into some big expenses in your spending history that you can live without, or reduce, at least temporarily. Here are a couple of examples: you might decide to move into less expensive housing, or skip a vacation.
Sell items you don't need and get a second job. Maybe you can get an additional job to get your down payment money. You can also get creative about the items you can put up for sale. A closetful of small things may add up to a fair amount at a garage or tag sale. You can also explore what any investments you hold will sell for.
Borrow from your retirement funds. Investigate the provisions of your retirement program. Many homebuyers get down payment money by withdrawing funds from Individual Retirement Accounts or pulling funds out of 401(k) programs. Be sure you comprehend the tax ramifications, your obligation for repaying the money, and any penalties for withdrawing early.
Ask for assistance from family members. First-time homebuyers somtimes get down payment help from thoughtful parents and other family members who may be prepared to help them get into their first home. Your family members may be pleased to help you reach the milestone of owning your own home.
Learn about housing finance agencies. Provisional mortgate loan programs are provided to buyers in specific circumstances, like low income buyers or homebuyers planning to remodel homes in a targeted part of town, among others. With the help of a housing finance agency, you probably will receive an interest rate that is below market, down payment assistance and other perks. Housing finance agencies can help eligible buyers with a lower interest rate, get you your down payment, and offer other benefits. These non-profit programs were established to boost the value of homes in particular neighborhoods.
Learn about low-down and no-down mortgage loans.
- Federal Housing Administration (FHA) mortgages
The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in helping low and moderate-income families qualify for mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals who need to get home financing.
FHA assists first-time homebuyers and others who might not be able to qualify for a traditional mortgage loan on their own, by offering mortgage insurance to private lenders.
Interest rates for an FHA loan usually feature the current interest rate, but the down payment for an FHA mortgage are below those of conventional loans. The required down payment may go as low as 3 percent while the closing costs could be financed in the mortgage loan.
- VA mortgages
With a guarantee from the Department of Veterans Affairs, a VA loan qualifies service people and veterans. This specialized loan requires no down payment, has reduced closing costs, and provides a competitive rate of interest. Although the VA does not actually finance the mortgage loans, it does issue a certificate of eligibility to qualify for a VA mortgage.
- Piggy-back loans
A piggy-back loan is a second mortgage that you close at the same time as the first. Usually the piggyback loan is for 10 percent of the home's amount, and the first mortgage finances 80 percent. Instead of the usual 20 percent down payment, the buyer will just have to pull together the remaining 10 percent.
- Carry-Back loans
With a carry-back mortgage, the you borrow part of the seller's home equity.. You would finance the majority of the purchase price with a traditional lending institution and borrow the remaining amount from the seller. Typically you will pay a somewhat higher rate on the loan from the seller.
No matter how you gather your down payment funds, the thrill of living in your own home will be just as great!
Want to discuss down payment options? Give us a call: 8668408745.