Putting Together Your Down Payment
Lots of people who are looking to buy a new home can easily qualify for a mortgage loan, but they don't have much to put up the standard down payment. Here are a few straightforward methods that will help you get together your down payment
Slash your budget and build up savings. Turn your budget inside out to discover extra money to go toward your down payment. You could also try enrolling in an automatic savings plan at your bank to have a percentage of your payroll automatically moved into a savings account. Some effective approaches to save additional funds include moving into housing that is less expensive, and staying local for your family vacation this year.
Sell items you don't really need and find a part-time job. Perhaps you can find an additional job to get your down payment money. You can also seriously consider the possessions you actually need and the things you can put up for sale. Multiple small things might add up to a fair amount at a garage or tag sale. Also, you might want to consider selling any investments you own.
Borrow money from your retirement plan. Investigate the parameters of your specific plan. Some people get down payment money from withdrawing what they need from their IRAs or borrowing from their 401(k) programs. Be sure you are clear about any penalties, the way this could affect on your income taxes, and repayment obligation.
Ask for help from family members. First-time buyers somtimes get help with their down payment help from giving family members who may be prepared to help get them in their first home. Your family members may be willing to help you reach the goal of owning your first home.
Research housing finance agencies. Provisional mortgage loans are extended to buyers in certain situations, like low income purchasers or future homeowners planning to improve houses in a certain place, among others. Working through this type of agency, you may be given an interest rate that is below market, down payment assistance and other perks. These types of agencies can help you with a reduced interest rate, get you your down payment, and provide other benefits. These non-profit agencies were established to build up home ownership in specific areas.
Research no-down and low-down mortgages.
- FHA mortgages
The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a critical role in helping low to moderate-income families qualify for mortgage loans. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals who wish to get mortgage loans.
FHA helps first-time buyers and others who may not be eligible for a traditional mortgage by themselves, by offering mortgage insurance to private lenders.
Down payment amounts for FHA loans are less than those for conventional mortgages, although these mortgages hold average interest rates. Closing costs might be financed within the mortgage, and your down payment can be as low as 3% of the purchase price.
- VA mortgage loans
VA loans are guaranteed by the Department of Veterans Affairs. Service persons and veterans can benefit from a VA loan, which typically offers a reasonable fixed interest rate, no down payment, and minimal closing costs. While it's true that the loans are not actually financed by the VA, the office verfifies applicants by issuing eligibility certificates.
- Piggy-back loans
You may finance your down payment with a second mortgage that closes along with the first. Most of the time, the piggyback loan is for 10 percent of the home's price, and the first mortgage covers 80 percent. The borrower pays the remaining 10%, rather than putting the typical 20% down payment.
- Carry-Back loans
In a "carry back" situation, the seller commits to lend you a portion of his own equity to help you with your down payment money. In this scenario, you would borrow the largest portion of the purchase price from a traditional mortgage lender and borrow the remainder from the seller. Usually this type of second mortgage has higher interest.
No matter your method of putting together your down payment funds, the thrill of living in your own home will be just as great!
Need to talk about your down payment? Call us: 703.255-5810.