Your Down Payment
Many buyers can easily qualify for several different kinds of mortgages, but they can't afford a large down payment. Here are a few straightforward ways to put together a down payment
Tighten your belt and save. Look for ways you can trim your monthly expenditures to put away money for a down payment. You might also try enrolling in an automatic savings plan to automatically have a specific portion of your take-home pay transferred into savings. Some practical ways to put together funds include moving into less expensive housing, and skipping a year's vacation.
Work more and sell things you do not need. Maybe you can find an additional job and save your earnings. You can also get creative about the things you may be able to put up for sale. Multiple small things may add up to a nice sum at a garage or tag sale. Also, you can think about selling any investments you own.
Borrow from your retirement plan. Check the parameters of your particular program. You may borrow money from a 401(k) for a down payment or withdraw from an IRA. Be sure to ask your plan representative about the tax ramifications, repayment terms, and any early withdrawal penalties.
Request a generous gift from family. Many buyers are sometimes fortunate enough to get down payment help from giving parents and other family members who are eager to help get them in their first home. Your family members may be willing to help you reach the milestone of owning your first home.
Learn about housing finance agencies. These agencies extend provisional loan programs to moderate and low income borrowers, buyers with an interest in rehabilitating a house in a targeted area, and additional particular types of buyers as defined by each agency. With the help of a housing finance agency, you probably will be given a below market interest rate, down payment assistance and other benefits. Housing finance agencies may help eligible homebuyers with a reduced rate of interest, help with your down payment, and provide other advantages. The primary goal of non-profit housing finance agencies is boosting residence ownership in targeted places.
Find out about low-down and no-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 an important part in assisting low to moderate-income individuals qualify for mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get
FHA helps first-time buyers and others who may not be eligible for a traditional mortgage loan by themselves, by offering mortgage insurance to the private lenders.
Down payment sums for FHA mortgages are below those for conventional mortgages, even though these mortgages have average rates of interest. Closing costs might be included in the mortgage, and your down payment may be as low as 3% of the purchase price.
- VA mortgage loans
VA loans are guaranteed by the U.S. Department of Veterans Affairs. Veterens and service people qualify for a VA loan, which usually offers a competitive fixed interest rate, no down payment, and limited closing costs. While it's true that the mortgage loans don't originate from the VA, the department verfifies applicants by issuing eligibility certificates.
- Piggy-back loans
A piggy-back loan is a second mortgage that closes at the same time as the first. Generally the piggyback loan takes care of 10 percent of the purchase price, and the first mortgage finances 80 percent. The homebuyer covers the remaining 10%, rather than come up with the typical 20% down payment.
- Carry-Back loans
We a seller carries back a second mortgage, the seller loans you part of his or her home equity. The buyer funds the highest percentage of the purchase price through a traditional mortgage program and finances the remaining funds with the seller. Often, this form of second mortgage has a higher rate of interest.
The feeling of accomplishment will be the same, no matter which strategy you use to come up with the down payment. Your new home will be your reward!
Need to talk about your down payment? Give us a call: 703.255-5810.