Your Down Payment

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Many borrowers qualify for a loan, but they can't afford a large down payment. We have a few ideas

Slash your budget and build up savings. Be on the look-out for ways you can trim your expenses to set aside money for a down payment. There are bank programs in which a specific portion of your paycheck is automatically deposited into savings every pay period. You could look into some big expenses in your budget that you can live without, or trim, at least temporarily. For example, you might decide to move into less expensive housing, or skip a family vacation.

Work more and sell items you do not need. Maybe you can find an additional job to get your down payment money. In addition, you can put together a comprehensive inventory of things you may be able to sell. Unused gold jewelry can bring a good amount from local jewelers. A closet full of small things may add up to a nice sum at a garage or tag sale. Also, you can think about selling any investments you hold.

Borrow money from your retirement plan. Explore the specifics for your individual plan. It is possible to borrow funds from a 401(k) plan for you down payment or withdraw from an Individual Retirement Account. Be sure to find out about the tax consequences, repayment terms, and any penalties for withdrawing early.

Ask for assistance from family members. Many buyers sometimes get help with their down payment help from gracious family members who may be willing to help them get into their first home. Your family members may be inclined to help you reach the goal of owning your first home.

Learn about housing finance agencies. These agencies offer provisional loan programs for moderate and low income borrowers, buyers with an interest in remodeling a home within a targeted part of the city, and other groups as defined by the finance agency. With the help of this kind of agency, you can get an interest rate that is below market, down payment assistance and other benefits. These types of agencies can assist you with a lower interest rate, help with your down payment, and offer other benefits. The primary mission of non-profit housing finance agencies is build up the purchase of homes in specific areas.

Find out about low-down and no-down mortgages.

• Federal Housing Administration (FHA) mortgage loans

  The Federal Housing Administration (FHA), which is inside the U.S. Department of Housing and Urban Development (HUD), plays a vital role in helping low and moderate-income buyers get 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 the private lenders, enabling new homebuyers who will not qualify for a conventional mortgage loan, to receive a mortgage. Down payment amounts for FHA mortgages are lower than those of traditional mortgages, although these loans have average rates of interest. Closing costs can be covered by the mortgage, and your down payment might be as low as 3 percent of the total.

• VA mortgage loans

  Guaranteed by the Department of Veterans Affairs, a VA loan assists service people and veterans. This special loan requires no down payment, has reduced closing costs, and offers a competitive interest rate. While the VA doesn't actually provide the loans, it does certify eligibility to qualify for a VA mortgage.

• Piggy-back loans

  A piggy-back loan is a second mortgage that you close with the first. Most of the time, the piggyback loan is for 10 percent of the home's amount, while the first mortgage covers 80 percent. The homebuyer pays the remaining 10%, rather than putting the typical 20% down payment.

• Carry-Back loans

  In the case of the seller "carrying back a second mortgage," the you borrow a portion of the seller's home equity.. The buyer finances the majority of the purchase price with a traditional mortgage program and finances the remaining funds with the seller. Generally, this type of second mortgage will have higher interest.

Need to talk about the best options for down payments? Give us a call at 952-929-2577.