Your Down Payment

Many buyers can qualify for various loan programs, but they can't afford a large down payment. Below are a few straightforward ways to get together your down payment

Slash your budget and build up savings. Turn your budget upside-down to uncover ways you can cut expenses to go toward your down payment. You also might enroll in an automatic savings plan at your bank to automatically have a set amount from your paycheck transferred into savings. Some effective methods to save additional funds include moving into housing that is less expensive, and staying local for your family vacation this year.

Work more and sell items you don't need. Look for a second job. This can be exhausting, but the temporary difficulty can help you get your down payment. You can also get creative about the things you can sell. Maybe you own desirable items you can put up for sale on an auction website, or household goods for a tag or garage sale. You might also explore what any investments you hold may sell for.

Borrow your down payment from your retirement plan. Explore the specifics for your particular plan. Some homebuyers get down payment money from withdrawing from their Individual Retirement Accounts or getting money out of 401(k) plans. Make sure to learn about the tax ramifications, your obligation for repaying funds, and possible penalties for withdrawing early.

Ask for a generous gift from your family. Many homebuyers are sometimes fortunate enough to get down payment help from caring parents and other family members who may be anxious to help get them in their first home. Your family members may be pleased to help you reach the goal of buying your first home.

Contact housing finance agencies. Provisional loan programs are offered to buyers in certain situations, like low income buyers or homebuyers planning to remodel homes in a targeted neighborhood, among others. Working with a housing finance agency, you probably will be given a below market interest rate, down payment help and other benefits. These types of agencies may assist eligible buyers with a reduced rate of interest, get you your down payment, and provide other benefits. The main purpose of non-profit housing finance agencies is boosting home ownership in certain parts of the city.

Learn about low-down and no-down mortgage loan programs.

• Federal Housing Administration (FHA) mortgages

  The Federal Housing Administration (FHA), which is inside the U.S. Department of Housing and Urban Development (HUD), plays a significant part in aiding low to moderate-income families qualify for mortgages. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids homebuyers in qualifying for mortgage loans. FHA helps first-time buyers and others who may not be able to qualify for a traditional mortgage by themselves, by providing mortgage insurance to private lenders. Down payment totals for FHA loans are lower than those of typical mortgages, although these mortgages have average rates of interest. The down payment can go as low as three percent and the closing costs can be packaged in the mortgage loan.

• VA loans

  VA loans are guaranteed by the U.S. Department of Veterans Affairs. Service persons and veterans can benefit from a VA loan, which typically offers a reasonable fixed interest rate, no down payment, and reduced closing costs. While the VA does not issue the mortgages, it does issue a certificate of eligibility to qualify for a VA loan.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes with the first. Generally the piggyback loan is for 10 percent of the purchase amount, and the first mortgage finances 80 percent. The homebuyer covers the remaining 10%, instead of putting the usual 20% down payment.

• Carry-Back loans

  We a seller carries back a second mortgage, the you borrow a portion of the seller's home equity.. In this scenario, you would finance the majority of the purchase price with a traditional lender and borrow the remainder from the seller. Generally, this type of second mortgage will have a higher rate of interest.

The satisfaction will be the same, no matter how you manage to get together your down payment. Your new home will be your reward!

Need to talk about the best options for down payments? Call us: 503-631-3311.