Your Down Payment
Lots of borrowers can qualify for several different kinds of mortgages, but they can't afford a large 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. Scrutinize your budget to find extra money to save for your down payment. Also, you can look into bank programs through which some of your paycheck is automatically transferred into savings every pay period. Some effective methods to build up funds include moving into less expensive housing, and staying home for your family vacation for a year or two.
Sell things you don't really need and get a second job. Perhaps you can find a second job and save your earnings. Additionally, you can put together an exhaustive list of things you can sell. Unused gold jewelry can bring a good amount from local jewelers. A closetful of small things might add up to a fair amount at a garage or tag sale. Also, you can look into selling any investments you own.
Borrow funds from a retirement plan. Research the details of your individual plan. It is possible to pull out funds from a 401(k) for you down payment or make a withdrawal from an Individual Retirement Account. Make sure to find out about the tax ramifications, your obligation for repayment, and possible early withdrawal penalties.
Ask for assistance from family members. Many homebuyers are sometimes lucky enough to receive down payment assistance from giving family members who are prepared to help them get into their own home. Your family members may be pleased to help you reach the milestone of having your first home.
Contact housing finance agencies. These types of agencies offer provisional mortgage loans to low and moderate-income homebuyers, buyers with an interest in remodeling a home within a particular part of the city, and other particular kinds of buyers as defined by the finance agency. With the help of a housing finance agency, you may get an interest rate that is below market, down payment help and other benefits. Housing finance agencies may help eligible buyers with a lower interest rate, help with your down payment, and offer other benefits. These non-profit agencies exist to build up community in particular neighborhoods.
Learn about low-down and no-down mortgage loan programs.
- FHA loans
The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a significant role in helping low to moderate-income families qualify for mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get
FHA provides mortgage insurance to private lenders, enabling new homebuyers who will not qualify for a conventional mortgage loan, to obtain a mortgage.
Down payment totals for FHA loans are lower than those of conventional mortgage loans, although these mortgages have current rates of interest. Closing costs can be included in the mortgage, while the down payment could be as low as 3% of the total amount.
- VA mortgage loans
VA loans are guaranteed by the U.S. Department of Veterans Affairs. Veterens and service people can get a VA loan, which generally offers a low fixed rate of interest, no down payment, and reduced closing costs. While the mortgages don't originate from the VA, the department certifies applicants by issuing eligibility certificates.
- Piggy-back loans
You can fund your down payment with a second mortgage that closes with the first. Generally the first mortgage is for 80% of the purchase price and the "piggyback" funds 10%. The homebuyer pays the remaining 10%, instead of putting the typical 20% down payment.
- Carry-Back loans
In a "carry back" situation, the seller commits to loan you some of his home equity to help you get your down payment money. The buyer finances the majority of the purchase price with a traditional mortgage program and finances the remaining funds with the seller. Typically, this form of second mortgage has higher interest.
No matter your method of pulling together your down payment, the satisfaction of owning your own home will be just as great!
Need to talk about down payments? Call us: 703.255-5810.