Your Down Payment
Many folks who are looking to buy a new house can easily qualify for several different kinds of mortgages, but they don't have much to pay a down payment. Want to buy a new house, but aren't sure how you should put together a down payment?
Slash your budget and build up savings. Scrutinize your budget to uncover ways you can cut expenses to save for your down payment. You could also try enrolling in an automatic savings plan at your bank to automatically have a specific amount from your paycheck transferred into savings. Some practical strategies to build up funds include moving into less expensive housing, and staying home for your vacation for a year or two.
Work a second job and sell things you do not need. Perhaps you can find a second job to get your down payment money. Additionally, you can make a comprehensive inventory of items you can sell. Unused gold jewelry can be sold at local jewelry stores. A closetful of small items could add up to a nice sum at a garage or tag sale. You might also look into what your investments could bring if sold.
Borrow from a retirement plan. Research the specifics of your individual plan. Some people get down payment money by withdrawing what they need from their IRAs or borrowing from their 401(k) programs. Be sure to learn about the tax ramifications, repayment terms, and penalties for withdrawing early.
Request a gift from your family. Many homebuyers somtimes get help with their down payment help from thoughtful family members who may be eager 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. These agencies provide special mortgate loan programs to moderate and low income buyers, buyers with an interest in remodeling a house in a targeted part of the city, and other certain kinds of buyers as specified by the agency. Financing with a housing finance agency, you can get a below market interest rate, down payment assistance and other perks. These kinds of agencies may assist eligible buyers with a lower interest rate, help with your down payment, and offer other advantages. The central purpose of not-for-profit housing finance agencies is promoting the purchase of homes in targeted parts of the city.
Find out about low-down and no-down mortgage loan programs.
- FHA mortgages
The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in aiding low to moderate-income buyers qualify for mortgages. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get
FHA offers mortgage insurance to the private lenders, ensuring the buyers are eligible for a home loan.
Down payment sums for FHA loans are lower than those of traditional mortgage loans, although these mortgages come with average rates of interest. Closing costs can be financed within the mortgage, and the down payment could be as low as 3 percent of the total amount.
- VA mortgage loans
VA loans are guaranteed by the U.S. Department of Veterans Affairs. Service persons and veterans are eligible for a VA loan, which typically offers a reasonable fixed interest rate, no down payment, and reduced closing costs. Even though the loans don't originate from the VA, the department certifies applicants by providing eligibility certificates.
- Piggy-back loans
A piggy-back loan is a second mortgage that you close along with the first. Generally the piggyback loan is for 10 percent of the purchase price, and the first mortgage covers 80 percent. Rather than the usual 20 percent down payment, the homebuyer will just have to cover the remaining 10 percent.
- Carry-Back loans
We a seller carries back a second mortgage, the seller loans you part of his or her home equity. In this scenario, you would finance the largest portion of the purchase price with a traditional lender and finance the remainder with the seller. Often, this type of second mortgage has a higher rate of interest.
The satisfaction will be the same, no matter how you manage to put together your down payment. Your new home will be your reward!
Want to discuss your down payment? Call us: 866-300-1550.