Your Down Payment

Lots of borrowers can easily qualify for various loan programs, but they can't afford a large down payment. Here's where you start

Slash the budget and build up savings. Turn your budget upside-down to uncover ways you can cut expenses to save for your down payment. Also, you can look into bank programs through which some of your take-home pay is automatically placed into savings each pay period. Some effective strategies to put together funds include moving into housing that is less expensive, and staying home for your vacation this year.

Work a second job and sell things you don't need. Look for a second job. This can be rough, but the temporary difficulty can provide your down payment money. In addition, you can put together an exhaustive list of things you may be able to sell. Unused gold jewelry can be sold at local jewelers. A closetful of small items may add up to a fair amount at a garage or tag sale. You could also research what any investments you have could bring if sold.

Borrow from your retirement funds. Research the specifics for your particular plan. Some homebuyers get down payment money by withdrawing from Individual Retirement Accounts or borrowing from their 401(k) programs. Make sure you comprehend the tax ramifications, repayment terms, and any penalties for withdrawing early.

Request a gift from family. Many homebuyers somtimes get help with their down payment help from giving family members who are anxious to help get them in their own home. Your family members may be willing to help you reach the goal of owning your own home.

Learn about housing finance agencies. These types of agencies offer special mortgate loan programs- for moderate and low income borrowers, buyers with an interest in remodeling a home in a targeted part of the city, and additional particular types of buyers as specified by the finance agency. Working with this type of agency, you probably will receive an interest rate that is below market, down payment assistance and other perks. Housing finance agencies can assist eligible homebuyers with a lower interest rate, help with your down payment, and offer other benefits. The central mission of not-for-profit housing finance agencies is promoting the purchase of homes in certain places.

Explore no-down and low-down mortgage loan programs.

  • Federal Housing Administration (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 helping low and moderate-income Americans qualify for mortgage loans. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals in getting mortgage loans. FHA assists first-time buyers and others who might not be able to qualify for a conventional loan by themselves, by offering mortgage insurance to the lenders. Down payment amounts for FHA loans are below those with typical mortgage loans, even though these mortgages come with average interest rates. The down payment may be as low as three percent while the closing costs might be packaged in the mortgage loan.

  • VA loans

    VA loans are guaranteed by the Department of Veterans Affairs. Service persons and veterans can benefit from a VA loan, which generally offers a competitive fixed rate of interest, no down payment, and reduced closing costs. Even though the VA doesn't provide the mortgages, it does certify eligibility to qualify for a VA loan.

  • Piggy-back loans

    You may finance a down payment through a second mortgage that closes along with the first. Usually the first mortgage covers 80% of the cost of the home and the "piggyback" funds 10%. Rather than the traditional 20 percent down payment, the homebuyer just has to cover the remaining 10 percent.

  • Carry-Back loans

    In a "carry back" situation, the seller commits to loan you part of his own equity to help you get your down payment funds. In this scenario, you would finance the largest portion of the purchase price with a traditional mortgage lender and finance the remainder with the seller. Typically you'll pay a slightly higher interest rate with the loan from the seller.

No matter how you gather your down payment, the thrill of owning your own home will be just as great!

Want to discuss down payments? Give us a call at (773) 774-9040 Ext 121.

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