Your Down Payment

Many folks who would like to purchase a new home can qualify for various loan programs, but they can't afford a large down payment. Do you want to look into getting a new house, but don't know how to get together a down payment?

Tighten your belt and save. Be on the look-out for ways you can reduce your expenditures to set aside money for a down payment. Also, you can look into bank programs through which some of your take-home pay is automatically placed into savings each pay period. You could look into some big expenses in your budget that you can live without, or trim, at least temporarily. Here are a couple of examples: you may move into less expensive housing, or stay close to home for your family vacation.

Sell things you do not need and find a part-time job. Try to get a second job. This can be rough, but the temporary difficulty can provide your down payment money. In addition, you can make a comprehensive inventory of things you may be able to sell. Unused gold jewelry can be sold at local jewelers. Multiple small items could add up to a fair amount at a garage or tag sale. You might also research what any investments you have will bring if sold.

Borrow from retirement funds. Explore the specifics of your particular plan. It is possible to borrow funds from a 401(k) for a down payment or perform a withdrawal from an Individual Retirement Account. You will need to ensure you understand about any penalties, the way this may affect on your taxes, and repayment obligation.

Ask for help from generous family members. First-time homebuyers somtimes receive down payment assistance from giving parents and other family members who may be able to help them get into their first home. Your family members may be happy at the chance to help you reach the milestone of buying your own home.

Contact housing finance agencies. These types of agencies offer provisional mortgage programs for low and moderate-income borrowers, buyers with an interest in rehabilitating a residence within a particular area, and other groups as specified by each finance agency. Working through this type of agency, you may receive an interest rate that is below market, down payment assistance and other incentives. These kinds of agencies can help you with a lower rate of interest, get you your down payment, and provide other benefits. These non-profit agencies exist to promote home ownership in particular neighborhoods.

Explore no-down and low-down mortgage loans.

  • Federal Housing Administration (FHA) mortgage loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a vital role in aiding low and moderate-income individuals qualify for mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers who need to get mortgage loans. FHA provides mortgage insurance to the private lenders, enabling new homebuyers who will not qualify for a conventional mortgage loan, to receive home financing. Interest rates for an FHA mortgage are generally the current interest rate, while the down payment for an FHA loan are below those of conventional loans. The down payment may go as low as three percent and the closing costs can be financed in the mortgage.

  • VA loans

    VA loans are guaranteed by the Department of Veterans Affairs. Veterens and service people can get a VA loan, which generally offers a low rate of interest, no down payment, and minimal closing costs. While it's true that the mortgages aren't actually issued by the VA, the office certifies borrowers by issuing eligibility certificates.

  • Piggy-back loans

    You may finance a down payment through a second mortgage that closes at the same time as the first. Generally the first mortgage covers 80% of the cost of the home and the "piggyback" funds 10%. In contrast to the traditional 20 percent down payment, the buyer will just have to cover the remaining 10 percent.

  • Carry-Back loans

    With a carry-back mortgage, the seller loans you part of his or her home equity. The buyer funds most of the purchase price with a traditional mortgage program and borrows the remainder from the seller. Typically, this kind of second mortgage will have a higher rate of interest.

No matter how you gather your down payment funds, the thrill of owning your own home will be just as great!

Want to discuss down payment options? Call us at 407-583-6250.

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