Your Down Payment

Lots of buyers qualify for several different kinds of mortgages, but they can't afford a large down payment. Here are a few methods that will help you put together your down payment

Slash the budget and build up savings. Be on the look-out for ways to reduce your monthly expenses to set aside funds for a down payment. There are bank programs in which a portion of your take-home pay is automatically transferred into savings each pay period. Some effective methods to build up funds include moving into less expensive housing, and skipping a year's vacation.

Work a second job and sell things you do not need. Maybe you can get a second job and save your earnings. You can also get creative about the items you can put up for sale. A closetful of small items can add up to a nice sum at a garage or tag sale. You might also explore what any investments you have could sell for.

Borrow from retirement funds. Check the parameters of your retirement program. Many homebuyers get down payment money from withdrawing what they need from IRAs or getting money out of their 401(k) plans. Be sure you are clear about any penalties, the way this may affect on your income taxes, and repayment terms.

Ask for a generous gift from family. Many buyers are often fortunate enough to receive help with their down payment help from thoughtful family members who may be able to help get them in their first home. Your family members may be inclined to help you reach the goal of buying your own home.

Learn about housing finance agencies. These agencies offer provisional mortgate loan programs- for low and moderate-income buyers, buyers interested in renovating a house in a targeted area, and additional certain types of buyers as defined by the finance agency. Working through this kind of agency, you can get a below market interest rate, down payment assistance and other benefits. These types of agencies may help eligible buyers with a reduced interest rate, get you your down payment, and offer other advantages. The central purpose of non-profit housing finance agencies is to promote the purchase of homes in certain areas.

Learn 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 assisting low to moderate-income families qualify for mortgage loans. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA aids first-time homebuyers and others who may not be able to qualify for a conventional mortgage loan by themselves, by offering mortgage insurance to the private lenders. Down payment totals for FHA loans are smaller than those with traditional mortgage loans, although these loans have current rates of interest. The required down payment may be as low as 3 percent and the closing costs could be financed in the mortgage loan.

• VA mortgage loans

  VA loans are guaranteed by the U.S. Department of Veterans Affairs. Veterens and service people qualify for a VA loan, which typically offers a reasonable fixed interest rate, no down payment, and minimal closing costs. While the mortgages don't originate from the VA, the office certifies borrowers by issuing eligibility certificates.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes at the same time as the first. Generally the piggyback loan takes care of 10 percent of the home's amount, and the first mortgage covers 80 percent. Instead of the usual 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 seller loans you part of his or her equity. The buyer finances most of the purchase price with a traditional mortgage program and borrows the remaining funds from the seller. Often, this type of second mortgage has a higher rate of interest.

No matter your strategy of pulling together your down payment money, the thrill of reaching the goal of living in your own home will be just as sweet!

Want to discuss the best options for down payments? Give us a call at 866-300-1550.