Your Down Payment

Lots of buyers qualify for a loan, but they don't have much to pay a down payment. We have a few ideas

Tighten your belt and save. Turn your budget upside-down to find ways you can cut expenses to go toward your down payment. Also, you can look into bank programs through which some of your paycheck is automatically deposited into savings every pay period. Some practical strategies to put together funds include moving into a residence that is less expensive, and staying home for your family vacation this year.

Work more and sell things you don't need. Perhaps you can find a second job to get your down payment money. Additionally, you can put together an exhaustive inventory of things you can sell. Unworn gold jewelry can be sold at local jewelers. Multiple small things could add up to a fair amount at a garage or tag sale. You can also research what any investments you own may sell for.

Borrow money from your retirement plan. Research the details for your particular plan. Many people get down payment money from withdrawing from Individual Retirement Accounts or borrowing from 401(k) plans. Make sure you know about any penalties, the way this could affect on your income taxes, and repayment obligation.

Ask for a gift from family. First-time homebuyers somtimes receive down payment assistance from gracious parents and other family members who are able to help get them in their own home. Your family members may be pleased to help you reach the milestone of owning your own home.

Learn about housing finance agencies. These agencies provide provisional mortgate loan programs- for low and moderate-income borrowers, buyers interested in sprucing up a house in a particular part of the city, and other groups as defined by each finance agency. With the help of this kind of agency, you may get a below market interest rate, down payment assistance and other incentives. Housing finance agencies may assist you with a reduced rate of interest, get you your down payment, and offer other benefits. These non-profit agencies exist to promote community in certain areas.

Find out about low-down and no-down mortgage loans.

  • FHA loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in aiding low and moderate-income Americans get mortgages. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals who need to get mortgage loans. FHA assists first-time buyers and others who might not be eligible for a typical mortgage by themselves, by providing mortgage insurance to the private lenders. Interest rates with an FHA loan are usually the going interest rate, but the down payment requirements for an FHA loan will be below those of conventional loans. The down payment may be as low as three percent while the closing costs can be financed in the mortgage loan.

  • VA loans

    VA loans are guaranteed by the Department of Veterans Affairs. Veterens and service people can benefit from a VA loan, which generally offers a competitive interest rate, no down payment, and minimal closing costs. While the loans aren't actually financed by the VA, the office certifies borrowers by providing eligibility certificates.

  • Piggy-back loans

    You may fund your down payment through a second mortgage that closes along with the first. Generally the piggyback loan is for 10 percent of the home's price, while the first mortgage finances 80 percent. The borrower covers the remaining 10%, instead of needing to pull together the typical 20% down payment.

  • Carry-Back loans

    In a "carry back" situation, the seller commits to loan you a piece of his own equity to help you get your down payment money. The buyer finances most of the purchase price through a traditional mortgage program and finances the remaining funds with the seller. Generally, this type of second mortgage will have a higher rate of interest.

The feeling of accomplishment will be the same, no matter how you manage to come up with your down payment. Your brand new home will be your reward!

Need to talk about down payments? Give us a call at 504-866-5626.

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