Your Down Payment

Lots of borrowers can easily qualify for a loan, but they don't have much to put up the standard down payment. Want to buy a new house, but aren't sure how to get together a down payment?

Reduce expenses and save. Be on the look-out for ways you can trim your monthly expenses to put away money for a down payment. You might also try enrolling in an automatic savings plan at your bank to have a percentage of your pay automatically transferred into your savings account. Some practical strategies to build up funds include moving into housing that is less expensive, and skipping your vacation for a year or two.

Sell things you don't really need and find a second job. Perhaps you can find a second job and save your earnings. In addition, you can make an exhaustive list of things you can sell. Broken gold jewelry can bring a good amount from local jewelry stores. Maybe you own desirable items you can sell at an online auction, or household goods for a garage or tag sale. You can also research what any investments you hold will sell for.

Borrow your down payment from your retirement plan. Check the provisions of your specific program. You may borrow money from a 401(k) plan for you down payment or withdraw from an Individual Retirement Account. Be sure you know about any penalties, the effect this may have on your income taxes, and repayment obligation.

Request a gift from your family. Many buyers somtimes get help with their down payment help from gracious 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 milestone of owning your own home.

Contact housing finance agencies. Special loan programs are provided to buyers in certain situations, such as low income purchasers or buyers looking to remodel homes in a particular part of town, among others. Financing through this kind of agency, you may get a below market interest rate, down payment assistance and other benefits. Housing finance agencies can assist eligible homebuyers with a reduced rate of interest, help with your down payment, and provide other benefits. These non-profit programs exist to boost community in particular places.

Find out about low-down and no-down mortgage loan programs.

• Federal Housing Administration (FHA) mortgages

  The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays a significant part in aiding low and moderate-income families get mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals who need to get mortgages. FHA aids first-time buyers and others who would not be able to qualify for a typical mortgage by themselves, by offering mortgage insurance to private lenders. Interest rates with an FHA loan normally feature the going interest rate, but the down payment requirements for an FHA loan will be lower than those of conventional loans. Closing costs may be covered by the mortgage, while your down payment might be as low as 3 percent of the total amount.

• VA loans

  With a guarantee from the Department of Veterans Affairs, a VA loan assists veterens and service people. This special loan requires no down payment, has limited closing costs, and provides a competitive interest rate. Even though the VA doesn't actually issue the loans, it does certify eligibility to qualify for a VA loan.

• Piggy-back loans

  You can finance a down payment with a second mortgage that closes with the first. Generally the piggyback loan is for 10 percent of the home's amount, while the first mortgage finances 80 percent. The homebuyer pays the remaining 10%, rather than come up with the typical 20% down payment.

• Carry-Back loans

  In the case of the seller "carrying back a second mortgage," the seller loans you part of his or her equity. In this scenario, you would finance the majority of the purchase price with a traditional lending institution and finance the remaining amount with the seller. Often, this kind of second mortgage has a higher rate of interest.

Need to talk about your down payment? Call us: 4054054054.