Putting Together Your Down Payment
Lots of people who are looking to buy a new house can qualify for several different kinds of mortgages, but they can't afford a large down payment. We have a few ideas
Reduce expenses and save. Turn your budget upside-down to discover extra money to save for your down payment. You could also try enrolling in an automatic savings plan at your bank to have a percentage of your payroll automatically moved into your savings account. You might look into some big expenses in your spending history that you can do without, or reduce, at least temporarily. For example, you may move into less expensive housing, or skip a family vacation.
Sell items you do not need and get a second job. Try to get a second job. This can be exhausting, but the temporary difficulty can help you get your down payment. Additionally, you can put together a comprehensive list of things you can sell. Unworn gold jewelry can be sold at local jewelers. Multiple small things might add up to a fair amount at a garage or tag sale. Also, you might want to consider selling any investments you own.
Borrow money from a retirement plan. Investigate the parameters of your specific plan. Some homebuyers get down payment money from withdrawing what they need from their IRAs or borrowing from their 401(k) plans. Be sure to learn about the tax consequences, your obligation for repayment, and possible early withdrawal penalties.
Ask for help from family members. First-time homebuyers somtimes receive down payment assistance from gracious family members who are prepared to help them get into their own home. Your family members may be inclined to help you reach the milestone of owning your own home.
Contact housing finance agencies. These agencies offer special mortgate loan programs- for low and moderate-income buyers, buyers with an interest in renovating a residence in a specific area, and additional particular kinds of buyers as specified by each finance agency. Working through this type of agency, you probably will be given an interest rate that is below market, down payment help and other perks. These types of agencies may assist eligible homebuyers with a lower interest rate, get you your down payment, and provide other advantages. The primary goal of not-for-profit housing finance agencies is boosting home ownership in particular areas.
Find out about low-down and no-down mortgages.
- FHA mortgage loans
The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in aiding low and moderate-income buyers get mortgages. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get
FHA helps first-time buyers and others who may not be able to qualify for a conventional loan by themselves, by offering mortgage insurance to lenders.
Down payment amounts for FHA mortgages are below those of traditional mortgage loans, although these mortgages have current rates of interest. The down payment can be as low as 3 percent and the closing costs may be financed in the mortgage loan.
- VA mortgages
With a guarantee from the Department of Veterans Affairs, a VA loan qualifies veterens and service people. This specialized loan requires no down payment, has limited closing costs, and offers a competitive interest rate. Although the loans are not actually provided by the VA, the department certifies borrowers by providing eligibility certificates.
- Piggy-back loans
You can finance a down payment through a second mortgage that closes at the same time as the first. Often the first mortgage covers 80% of the cost of the home and the "piggyback" funds 10%. The homebuyer pays the remaining 10%, instead of come up with the typical 20% down payment.
- Carry-Back loans
With a carry-back mortgage, the seller loans you part of his or her equity. You would borrow the largest portion of the purchase price from a traditional mortgage lender and finance the remaining amount with the seller. Often, this type of second mortgage has a higher rate of interest.
No matter your strategy of getting together down payment money, the thrill of owning your own home will be just as great!
Need to talk about the best options for down payments? Give us a call: 469-640-0400.