Your Down Payment
Lots of borrowers qualify for several different kinds of mortgages, but they don't have a large sum of cash to put up a down payment. Here's where to get started
Reduce expenses and save. Scrutinize your budget to discover extra money to go toward your down payment. Also, you can look into bank programs through which some of your take-home pay is automatically placed into a savings account each pay period. Some effective ways to build up funds include moving into housing that is less expensive, and skipping a year's vacation.
Sell things you do not really need and get a second job. Maybe you can get a second job and build up your earnings. In addition, you can put together an exhaustive inventory of things you can sell. Unworn gold jewelry can be sold at local jewelry stores. A closetful of small things may add up to a nice sum at a garage or tag sale. Also, you might want to think about selling any investments you own.
Borrow from your retirement funds. Research the details of your particular plan. Some people get down payment money by withdrawing funds from IRAs or borrowing from their 401(k) programs. Be sure you understand the tax ramifications, your obligation for repaying the money, and possible penalties for withdrawing early.
Ask for help from generous members of your family. First-time homebuyers somtimes get down payment help from giving family members who are anxious to help get them in their first home. Your family members may be pleased at the chance to help you reach the goal of owning your own home.
Research housing finance agencies. Provisional mortgate loan programs are given to buyers in specific circumstances, like low income homebuyers or buyers looking to renovating homes in a targeted area, among others. Working with a housing finance agency, you probably will be given an interest rate that is below market, down payment assistance and other advantages. These types of agencies can assist eligible homebuyers with a reduced interest rate, get you your down payment, and provide other advantages. The primary mission of non-profit housing finance agencies is build up the purchase of homes in specific places.
Learn about low-down and no-down mortgage loan programs.
- Federal Housing Administration (FHA) loans
The Federal Housing Administration (FHA), which is inside the U.S. Department of Housing and Urban Development (HUD), plays an important part in aiding low and moderate-income families get mortgage loans. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers who wish to qualify for home financing.
FHA aids first-time homebuyers and others who may not be eligible for a typical loan on their own, by providing mortgage insurance to lenders.
Interest rates with an FHA mortgage generally feature the going interest rate, while the down payment for an FHA mortgage will be below those of conventional loans. Closing costs may be included in the mortgage, and your down payment may be as low as 3 percent of the total amount.
- VA mortgages
Guaranteed by the Department of Veterans Affairs, a VA loan qualifies veterens and service people. This special loan requires no down payment, has limited closing costs, and provides a competitive interest rate. Even though the VA doesn't finance the mortgages, 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 closes along with the first. Generally the piggyback loan takes care of 10 percent of the purchase amount, while the first mortgage covers 80 percent. Instead of the traditional 20 percent down payment, the buyer just has to cover the remaining 10 percent.
- Carry-Back loans
We a seller carries back a second mortgage, the you borrow part of the seller's home equity.. The buyer finances the highest percentage of the purchase price through a traditional mortgage program and borrows the remaining funds from the seller. Usually you will pay a somewhat higher rate with the loan from the seller.
The feeling of accomplishment 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 down payment options? Give us a call: 562 320-0510.