Your Down Payment
Lots of folks who would like to purchase a new house can qualify for a mortgage loan, but they don't have much to put up a down payment. We have a few ideas
Slash your budget and build up savings. Turn your budget inside out to find extra money to go toward your down payment. There are bank programs through which a specific portion of your take-home pay is automatically placed into a savings account each pay period. Some effective methods to put together funds include moving into a residence that is less expensive, and skipping your vacation for a year or two.
Work a second job and sell things you don't need. Look for a second job. This can be exhausting, but the temporary difficulty can help you get your down payment. Additionally, you can make an exhaustive inventory of things you can sell. Unworn gold jewelry can bring a good amount from local jewelers. A closetful of small items can add up to a fair amount at a garage or tag sale. You could also look into what any investments you own may sell for.
Tap into your retirement funds. Explore the details of your individual plan. You can borrow funds from a 401(k) plan for a down payment or withdraw from an Individual Retirement Account. Make sure you comprehend the tax consequences, repayment terms, and possible early withdrawal penalties.
Ask for assistance from generous members of your family. Many buyers are often fortunate enough to get help with their down payment help from giving family members who are anxious to help get them in their own home. Your family members may be eager to help you reach the goal of buying your first home.
Research housing finance agencies. These types of agencies offer provisional mortgate loan programs- for low and moderate-income borrowers, buyers interested in rehabilitating a residence in a particular part of the city, and other groups as specified by each finance agency. Working with this type of agency, you probably will receive a below market interest rate, down payment assistance and other incentives. These types of agencies may help you with a reduced rate of interest, get you your down payment, and provide other advantages. The main purpose of non-profit housing finance agencies is to boost home ownership in targeted parts of the city.
Learn about low-down and no-down mortgage loans.
- FHA loans
The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in assisting low and moderate-income families qualify for mortgage loans. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get
FHA aids first-time buyers and others who might not be able to qualify for a conventional mortgage loan on their own, by offering mortgage insurance to the private lenders.
Down payment requirements for FHA loans are smaller than those with traditional mortgages, even though these loans have average rates of interest. Closing costs might be financed within the mortgage, and the down payment can be as low as 3% of the total.
- VA loans
With a guarantee from the Department of Veterans Affairs, a VA loan assists veterens and service people. This particular loan does not require a down payment, has mimimal closing costs, and provides the advantage of a competitive rate of interest. Although the loans don't originate from the VA, the office verfifies applicants by issuing eligibility certificates.
- Piggy-back loans
A piggy-back loan is a second mortgage that you close at the same time as the first. In most cases the first mortgage is for 80% of the cost of the home and the "piggyback" is for 10%. The homebuyer covers the remaining 10%, instead of needing to put together the usual 20% down payment.
- Carry-Back loans
In a "carry back" situation, the seller agrees to lend you a portion of his own equity to help you get your down payment money. In this scenario, you would finance the majority of the purchase price with a traditional lender and finance the remaining amount with the seller. Typically you'll pay a slightly higher interest rate with the loan from the seller.
The satisfaction will be the same, no matter which strategy you use to pull together the down payment. Your new home will be your reward!
Want to discuss the best options for down payments? Call us: (916) 399-5500.