Your Down Payment

Lots of buyers qualify for several different kinds of mortgages, but they can't afford a large down payment. Here are a few tips:

Slash your budget and build up savings. Be on the look-out for ways you can trim your expenditures to set aside funds for a down payment. There are bank programs in which some of your paycheck is automatically deposited into savings every pay period. Some effective strategies to save additional funds include moving into a residence that is less expensive, and skipping your vacation for a year or two.

Work a second job and sell things you do not need. Perhaps you can get a second job and save your earnings. You can also get creative about the items you could be able to put up for sale. A closetful of small items may add up to a fair amount at a garage or tag sale. You might also explore what your investments may bring if sold.

Borrow from a retirement plan. Explore the specifics for your particular plan. You can borrow money from a 401(k) plan for you down payment or withdraw from an IRA. Be sure you are knowledgable about any penalties, the way this may affect on income taxes, and repayment obligation.

Request a generous gift from your family. First-time homebuyers somtimes receive down payment help from gracious family members who may be able to help get them in their own home. Your family members may be eager to help you reach the milestone of having your first home.

Research housing finance agencies. Provisional mortgate loan programs are offered to homebuyers in certain circumstances, like low income purchasers or homebuyers planning to improve houses in a certain part of town, among others. Working through a housing finance agency, you may be given an interest rate that is below market, down payment assistance and other incentives. These kinds of agencies can help eligible homebuyers with a lower rate of interest, get you your down payment, and offer other advantages. These non-profit agencies to promote community in certain neighborhoods.

Learn about low-down and no-down mortgage loan programs.

  • FHA mortgages

    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 and moderate-income Americans get mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids homebuyers who wish to get mortgages. FHA assists first-time homebuyers and others who may not be able to qualify for a typical mortgage on their own, by providing mortgage insurance to lenders. Down payment requirements for FHA mortgages are less than those with typical mortgages, even though these mortgages hold current interest rates. The required down payment can go as low as 3 percent while the closing costs might be covered by the mortgage loan.

  • VA loans

    VA loans are guaranteed by the U.S. Department of Veterans Affairs. Service persons and veterans can get a VA loan, which generally offers a reasonable rate of interest, no down payment, and limited closing costs. While the VA does not actually provide the loans, it does certify eligibility to apply for a VA loan.

  • Piggy-back loans

    You may finance your down payment with a second mortgage that closes along with the first. Generally the piggyback loan takes care of 10 percent of the purchase amount, while the first mortgage finances 80 percent. The borrower pays the remaining 10%, instead of come up with the typical 20% down payment.

  • Carry-Back loans

    With a carry-back mortgage, the seller loans you part of his or her equity. The buyer funds most of the purchase price through a traditional mortgage program and borrows the remaining funds from the seller. Typically you'll pay a slightly higher rate on the loan from the seller.

The feeling of accomplishment will be the same, no matter which approach you use to pull together your down payment. Your new home will be your reward!

Need to talk about down payment options? Call us at (478) 746-2063.

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