Putting Together Your Down Payment

Lots of folks who are looking to buy a new house can qualify for various loan programs, but they don't have a large sum of cash to pay the standard down payment. Here are a few methods that will help you put together your down payment

Tighten your belt and save. Look for ways to trim your expenditures to put away money for a down payment. You also could enroll in an automatic savings plan to have a portion of your pay automatically deposited into savings. Some practical methods to save additional funds include moving into less expensive housing, and skipping your vacation for a year or two.

Sell things you do not need and find a part-time job. Perhaps you can get a second job and build up your earnings. Additionally, you can make a comprehensive inventory of things you may be able to sell. Unused gold jewelry can be sold at local jewelry stores. You may have desirable items you can put up for sale on an auction website, or quality household goods for a tag or garage sale. Also, you can consider selling any investments you own.

Tap into retirement funds. Check the parameters of your specific program. You can borrow funds from a 401(k) plan for you down payment or withdraw from an Individual Retirement Account. Be sure you understand about any penalties, the way this will affect on income taxes, and repayment obligation.

Ask for a generous gift from family. Many buyers are sometimes lucky enough to get help with their down payment help from gracious family members who may be eager to help get them in their own home. Your family members may be happy at the chance to help you reach the goal of owning your own home.

Learn about housing finance agencies. These types of agencies extend provisional mortgate loan programs to low and moderate-income homebuyers, buyers interested in remodeling a house within a particular part of the city, and additional groups as defined by each finance agency. Financing with this kind of agency, you can receive a below market interest rate, down payment help and other perks. These types of agencies can assist eligible homebuyers with a reduced interest rate, get you your down payment, and provide other advantages. The main goal of non-profit housing finance agencies is build up residence ownership in specific places.

Explore no-down and low-down mortgage loan programs.

  • Federal Housing Administration (FHA) mortgages

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in helping low and moderate-income individuals qualify for mortgages. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA assists first-time homebuyers and others who might not be able to qualify for a typical mortgage loan on their own, by providing mortgage insurance to lenders. Interest rates for an FHA loan typically feature the going interest rate, while the down payment with an FHA loan are lower than those of conventional loans. Closing costs might be covered by the mortgage, and your down payment can be as low as 3 percent of the purchase price.

  • VA mortgage loans

    VA loans are guaranteed by the U.S. Department of Veterans Affairs. Service persons and veterans can receive a VA loan, which usually offers a low fixed rate of interest, no down payment, and minimal closing costs. While the loans don't originate from the VA, the office certifies borrowers by providing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes with the first. Most of the time, the first mortgage is for 80% of the purchase price and the "piggyback" is for 10%. The homebuyer pays the remaining 10%, rather than needing to pull together the typical 20% down payment.

  • Carry-Back loans

    In a "carry back" mortgage, the seller commits to loan you a piece of his home equity to help you get your down payment funds. You would finance the largest portion of the purchase price with a traditional lender and borrow the remaining amount from the seller. Typically you'll pay a slightly higher rate on the loan financed by the seller.

No matter your method of putting together down payment funds, the satisfaction of reaching the goal of living in your own home will be just as great!

Need to talk about down payments? Call us: (973) 601-2122.

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