Your Down Payment
Many borrowers can qualify for various loan programs, but they can't afford a large down payment. Want to look into getting a new house, but don't know how you should get together your down payment?
Tighten your belt and save. Be on the look-out for ways to reduce your expenditures to set aside money for a down payment. You might also try enrolling in an automatic savings plan to have a portion of your pay automatically moved into savings. You might look into some big expenses in your budget that you can give up, or trim, at least temporarily. Here are a couple of examples: you may move into less expensive housing, or skip a vacation.
Sell items you don't need and get a second job. Look for a second job. This can be exhausting, but the temporary trial can help you get your down payment. In addition, you can make an exhaustive inventory of items you may be able to sell. Unused gold jewelry can be sold at local jewelry stores. A closetful of small items may add up to a nice sum at a garage or tag sale. You can also research what any investments you hold will sell for.
Borrow your down payment from your retirement plan. Research the specifics for your individual plan. Many people get down payment money by withdrawing from their Individual Retirement Accounts or getting money out of their 401(k) programs. Be sure to learn about the tax ramifications, repayment terms, and early withdrawal penalties.
Ask for help from generous family members. Many homebuyers are sometimes fortunate enough to get help with their down payment assistance from giving parents and other family members who may be prepared to help get them in their first home. Your family members may be pleased to help you reach the goal of owning your first home.
Contact housing finance agencies. Provisional mortgage programs are provided to homebuyers in specific situations, like low income buyers or buyers looking to renovating homes in a specific area, among others. Working through a housing finance agency, you probably will be given a below market interest rate, down payment help and other benefits. These types of agencies can help you with a reduced interest rate, help with your down payment, and offer other benefits. The central mission of non-profit housing finance agencies is to boost home ownership in particular parts of the city.
Explore no-down and low-down mortgage loans.
- Federal Housing Administration (FHA) loans
The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a significant part in aiding low to moderate-income individuals get mortgages. Part 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 may not be able to qualify for a typical mortgage by themselves, by providing mortgage insurance to the lenders.
Interest rates for an FHA loan usually feature the going interest rate, but the down payment for an FHA mortgage will be lower than those of conventional loans. The required down payment may be as low as three percent while the closing costs can be covered by the mortgage.
- VA loans
VA loans are guaranteed by the Department of Veterans Affairs. Veterens and service people can benefit from a VA loan, which usually offers a competitive fixed interest rate, no down payment, and limited closing costs. While the loans aren't actually financed by the VA, the department certifies applicants by providing eligibility certificates.
- Piggy-back loans
A piggy-back loan is a second mortgage that closes at the same time as the first. In most cases the first mortgage covers 80% of the purchase price and the "piggyback" funds 10%. The borrower covers the remaining 10%, instead of having to pull together the typical 20% down payment.
- Carry-Back loans
With a carry-back mortgage, the you borrow a portion of the seller's home equity.. In this scenario, you would finance the majority of the purchase price with a traditional mortgage lender and borrow the remaining amount from the seller. Usually you will pay a slightly higher interest rate with the loan from the seller.
No matter how you gather your down payment, the thrill of living in your own home will be just as sweet!
Need to talk about down payments? Call us at 703.255-5810.