Your Down Payment

Lots of buyers can qualify for various loan programs, but they don't have a lot of cash to put up the standard down payment. We have a few ideas

Slash your budget and build up savings. Scrutinize your budget to discover extra money to save for your down payment. There are bank programs in which a portion of your paycheck is automatically placed into a savings account every pay period. Some practical methods to put together funds include moving into less expensive housing, and skipping a year's vacation.

Sell items you do not need and get a part-time job. Perhaps you can find an additional job and build up your earnings. You can also get creative about the things you migh be able to put up for sale. You may own collectibles you can sell at an online auction, or household goods for a tag or garage sale. Also, you can consider selling any investments you own.

Borrow from retirement funds. Research the specifics for your individual plan. Some people get down payment money by withdrawing from IRAs or pulling funds out of their 401(k) programs. You will want to ensure you are clear about any penalties, the effect this could have on income taxes, and repayment terms.

Ask for assistance from family members. First-time buyers are often fortunate enough to receive down payment assistance from thoughtful family members who are able to help get them in their first home. Your family members may be pleased to help you reach the milestone of owning your own home.

Contact housing finance agencies. These types of agencies extend special mortgate loan programs to low and moderate-income homebuyers, buyers interested in remodeling a residence in a targeted area, and additional certain kinds of buyers as defined by the agency. With the help of a housing finance agency, you can receive a below market interest rate, down payment assistance and other advantages. Housing finance agencies can help eligible buyers with a reduced rate of interest, help with your down payment, and offer other assistance. These non-profit programs exist to boost home ownership in particular neighborhoods.

Research 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 an important part in assisting low and moderate-income Americans get mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA provides mortgage insurance to private lenders, enabling homebuyers who might not qualify for a traditional loan, to get a mortgage. Interest rates for an FHA mortgage typically feature the going interest rate, but the down payment amounts with an FHA loan are smaller than those of conventional loans. Closing costs may be included in the mortgage, while your down payment can be as low as 3% of the total.

• VA mortgage loans

  VA loans are backed by the Department of Veterans Affairs. Service persons and veterans can get a VA loan, which generally offers a low fixed interest rate, no down payment, and limited closing costs. Even though the loans don't originate from the VA, the department certifies applicants by issuing eligibility certificates.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes along with the first. In most cases the first mortgage covers 80% of the purchase amount and the "piggyback" funds 10%. Rather than the traditional 20 percent down payment, the homebuyer will just have to cover the remaining 10 percent.

• Carry-Back loans

  In a "carry back" situation, the seller commits to lend you part of his home equity to help you with your down payment funds. The buyer funds most of the purchase price through a traditional mortgage program and borrows the remainder from the seller. Usually you will pay a slightly higher interest rate on the loan financed by the seller.

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

Need to talk about down payments? Give us a call: (512)-733-4868.