Your Down Payment

Many people who would like to purchase a new home can easily qualify for several different kinds of mortgages, but they can't afford a large down payment. Want to buy a new home, but don't know how to get together a down payment?

Reduce expenses and save. Turn your budget upside-down to uncover extra money to save for your down payment. There are bank programs through which a specific portion of your paycheck is automatically transferred into savings every pay period. Some effective approaches to build up funds include moving into a residence that is less expensive, and staying home for your vacation for a year or two.

Work more and sell items you don't need. Perhaps you can get an additional job and save your earnings. You can also get serious about the possessions you actually need and the items you may be able to sell. Maybe you have collectibles you can sell at an online auction, or household items for a tag or garage sale. You might also research what your investments may sell for.

Borrow from a retirement plan. Investigate the parameters of your specific program. You can take out money from a 401(k) for a down payment or get a withdrawal from an IRA. Make sure you understand about any penalties, the way this may affect on taxes, and repayment obligation.

Request a gift from family. Many buyers are often lucky enough to receive down payment assistance from gracious parents and other family members who are prepared to help them get into their own home. Your family members may be willing to help you reach the milestone of owning your first home.

Contact housing finance agencies. These agencies offer provisional mortgage loans for moderate and low income borrowers, buyers interested in rehabilitating a residence in a particular part of the city, and other groups as specified by each agency. With the help of a housing finance agency, you may get a below market interest rate, down payment help and other incentives. These kinds of agencies may help you with a reduced interest rate, get you your down payment, and provide other benefits. These non-profit programs to build up community in particular neighborhoods.

Explore no-down and low-down mortgage loan programs.

  • FHA loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a significant role in aiding low to moderate-income buyers get mortgage loans. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers who need to get mortgage loans. FHA helps first-time homebuyers and others who would not be able to qualify for a traditional mortgage loan by themselves, by offering mortgage insurance to the lenders. Down payment totals for FHA loans are less than those with conventional mortgage loans, although these mortgages have current rates of interest. Closing costs may be included in the mortgage, and the down payment might be as low as 3 percent of the total.

  • VA mortgage loans

    Guaranteed by the Department of Veterans Affairs, a VA loan assists service people and veterans. This particular loan does not require a down payment, has mimimal closing costs, and provides a competitive interest rate. Even though the VA does not provide the loans, it does certify eligibility to qualify for a VA loan.

  • Piggy-back loans

    You may finance a down payment through a second mortgage that closes with the first. Most of the time, the piggyback loan takes care of 10 percent of the home's price, while the first mortgage finances 80 percent. The borrower covers the remaining 10%, rather than needing to put together the typical 20% down payment.

  • Carry-Back loans

    In the option of a seller "carrying 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 remainder from the seller. Typically you'll pay a somewhat higher interest rate with the loan financed by the seller.

The feeling of accomplishment will be the same, no matter which strategy you use to pull together your down payment. Your new home will be your reward!

Want to discuss down payments? Call us at 972-279-3700.

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