Your Down Payment

Lots of folks who would like to buy a new home can easily qualify for a loan, but they can't afford a large down payment. We have a few suggestions

Slash your budget and build up savings. Turn your budget upside-down to find extra money to save for your down payment. There are bank programs in which a portion of your paycheck is automatically deposited into a savings account every pay period. Some practical approaches to put together funds include moving into a residence that is less expensive, and staying home for your family vacation this year.

Work a second job and sell items you don't need. Perhaps you can get a second job and build up your earnings. You can also get creative about the items you may be able to put up for sale. A closetful of small items might add up to a fair amount at a garage or tag sale. Also, you can think about selling any investments you hold.

Borrow funds from a retirement plan. Check the parameters of your particular plan. Many homebuyers get down payment money from withdrawing what they need from their Individual Retirement Accounts or taking money out of 401(k) programs. Be sure to learn about the tax consequences, repayment terms, and early withdrawal penalties.

Ask for assistance from generous members of your family. First-time buyers are often lucky enough to get help with their down payment help from gracious family members who are eager to help get them in their first home. Your family members may be eager to help you reach the goal of buying your first home.

Contact housing finance agencies. These types of agencies offer special mortgage programs to moderate and low income homebuyers, buyers interested in remodeling a home in a targeted part of the city, and additional particular kinds of buyers as specified by each finance 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. These types of agencies can help eligible homebuyers with a lower rate of interest, get you your down payment, and offer other assistance. The principal mission of not-for-profit housing finance agencies is promoting residential ownership in specific places.

Explore no-down and low-down mortgage loans.

  • FHA mortgages

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in helping low and moderate-income individuals qualify for mortgage loans. Part of the United States 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 typical mortgage by themselves, by offering mortgage insurance to lenders. Interest rates for an FHA mortgage are usually the current interest rate, but the down payment amounts with an FHA loan are below those of conventional loans. Closing costs may be financed in the mortgage, and your down payment can be as low as 3% of the total.

  • VA loans

    VA loans are guaranteed by the Department of Veterans Affairs. Service persons and veterans qualify for a VA loan, which generally offers a competitive interest rate, no down payment, and limited closing costs. Even though the VA does not actually provide the mortgage loans, it does issue a certificate of eligibility to apply for a VA mortgage.

  • Piggy-back loans

    You can fund a down payment with a second mortgage that closes along with the first. Usually the piggyback loan takes care of 10 percent of the home's amount, and the first mortgage finances 80 percent. Instead of the traditional 20 percent down payment, the buyer just has to cover the remaining 10 percent.

  • Carry-Back loans

    We a seller carries back a second mortgage, the seller loans you part of his or her home equity. In this scenario, you would borrow the majority of the purchase price from a traditional mortgage lender and finance the remaining amount with the seller. Often, this kind of second mortgage has a higher rate of interest.

No matter how you gather down payment money, the satisfaction of living in your own home will be just as sweet!

Want to discuss your down payment? Call us: 504-866-5626.

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