Your Down Payment

Lots of buyers qualify for a mortgage loan, but they don't have a large sum of cash to pay the standard down payment. Do you want to buy a new house, but don't know how you should get together a down payment?

Slash the budget and build up savings. Be on the look-out for ways to trim your expenditures to put away money for a down payment. Also, you can look into bank programs in which a specific portion of your take-home pay is automatically placed into a savings account each pay period. You might look into some big expenses in your spending history that you can do without, or trim, at least temporarily. For example, you might decide to move into less expensive housing, or skip a family vacation.

Sell items you do not need and find a part-time job. Maybe you can find an additional job to get your down payment money. In addition, you can make a comprehensive inventory of items you can sell. Broken gold jewelry can bring a good price from local jewelry stores. Maybe you have collectibles you can sell at an auction website, or quality household items for a tag or garage sale. Also, you can look into selling any investments you own.

Tap into your retirement funds. Research the details for your individual plan. Many people get down payment money from withdrawing what they need from their Individual Retirement Accounts or borrowing from their 401(k) programs. You will want to ensure you are knowledgable about any penalties, the effect this will have on your taxes, and repayment terms.

Ask for assistance from generous members of your family. Many homebuyers somtimes receive help with their down payment help from thoughtful parents and other family members who are prepared to help them get into their first home. Your family members may be pleased to help you reach the goal of owning your own home.

Contact housing finance agencies. These agencies offer provisional loan programs for low and moderate-income borrowers, buyers interested in remodeling a home within a specific area, and other groups as defined by each agency. Financing through a housing finance agency, you probably will be given an interest rate that is below market, down payment assistance and other advantages. These types of agencies can help eligible homebuyers with a reduced interest rate, get you your down payment, and provide other assistance. These non-profit agencies were established to build up community in certain neighborhoods.

Learn about low-down and no-down mortgage loans.

  • Federal Housing Administration (FHA) loans

    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 to moderate-income buyers qualify for mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers in getting home financing. FHA aids first-time homebuyers and others who may not be eligible for a typical mortgage on their own, by providing mortgage insurance to the lenders. Down payment sums for FHA loans are below those with typical mortgage loans, even though these loans hold current interest rates. Closing costs may be financed in the mortgage, while your down payment might be as low as 3 percent of the total amount.

  • VA mortgage loans

    With a guarantee from the Department of Veterans Affairs, a VA loan assists veterens and service people. This specialized loan requires no down payment, has reduced closing costs, and provides the benefit of a competitive rate of interest. Although the VA doesn't finance the mortgage loans, it does issue a certificate of eligibility to apply for a VA mortgage.

  • Piggy-back loans

    You may finance your down payment using a second mortgage that closes at the same time as the first. Most of the time, the first mortgage covers 80% of the cost of the home and the "piggyback" is for 10%. The borrower pays the remaining 10%, instead of putting the usual 20% down payment.

  • Carry-Back loans

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

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

Need to talk about down payments? Give us a call: (203) 526-9345.

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