Your Down Payment

Many borrowers can qualify for a loan, but they don't have a lot of money to put up a down payment. Here are a few methods that will help you put together a down payment

Tighten your belt and save. Look for ways to trim your expenditures to put away money for a down payment. There are bank programs in which a specific portion of your paycheck is automatically placed into savings each pay period. You would be wise to look into some big expenses in your budget that you can give up, or reduce, at least temporarily. Here are a couple of examples: you might decide to move into less expensive housing, or stay close to home for your vacation.

Work a second job and sell items you don't need. Try to get a second job. This can be exhausting, but the temporary difficulty can help you get your down payment. You can also get serious about the possessions you really need and the items you could be able to put up for sale. You may have collectibles you can put up for sale on an online auction, or quality household goods for a tag or garage sale. You could also research what your investments will bring if sold.

Borrow from a retirement plan. Research the details for your particular plan. It is possible to pull out money from a 401(k) plan for you down payment or perform a withdrawal from an IRA. Make sure you understand the tax ramifications, repayment terms, and early withdrawal penalties.

Ask for a gift from your family. Many buyers somtimes get down payment help from gracious family members who may be anxious to help them get into their own home. Your family members may be willing to help you reach the milestone of buying your first home.

Learn about housing finance agencies. Special mortgage programs are given to homebuyers in certain circumstances, like low income purchasers or buyers looking to renovating houses in a specific place, among others. With the help of a housing finance agency, you may get an interest rate that is below market, down payment assistance and other perks. Housing finance agencies can assist you with a lower rate of interest, get you your down payment, and provide other assistance. These non-profit agencies exist to boost home ownership in specific neighborhoods.

Find out about low-down and no-down mortgages.

  • Federal Housing Administration (FHA) loans

    The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays a significant part in aiding low and moderate-income buyers qualify for mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA offers mortgage insurance to private lenders, enabling new homebuyers who may not be eligible for a conventional mortgage loan, to obtain home financing. Down payment sums for FHA mortgages are less than those for traditional mortgages, even though these loans come with average rates of interest. The required down payment may go as low as 3 percent and the closing costs may be financed in the mortgage loan.

  • VA mortgages

    Guaranteed by the Department of Veterans Affairs, a VA loan is offered to service people and veterans. This special loan does not require a down payment, has reduced closing costs, and provides a competitive rate of interest. Although the mortgages don't originate from the VA, the office certifies applicants by issuing eligibility certificates.

  • Piggy-back loans

    You can fund a down payment through a second mortgage that closes with the first. Most of the time, the piggyback loan is for 10 percent of the home's price, while the first mortgage covers 80 percent. The borrower pays the remaining 10%, rather than needing to pull together the typical 20% down payment.

  • Carry-Back loans

    With a carry-back mortgage, the seller loans you part of his or her equity. The buyer funds most of the purchase price through a traditional mortgage program and borrows the remaining funds from the seller. Typically you'll pay a slightly higher interest rate on the loan from the seller.

The satisfaction will be the same, no matter how you manage to come up with the down payment. Your brand new home will be your reward!

Want to discuss the best options for down payments? Give us a call at (478) 746-2063.

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