Your Down Payment

Many people who would like to buy a new house qualify for various loan programs, but they don't have much to put up the standard down payment. Here's where you start

Reduce expenses and save. Scrutinize your budget to find extra money to go toward your down payment. You may also decide to enroll in an automatic savings plan to automatically have a predetermined portion of your paycheck transferred into your savings account. Some practical ways to build up funds include moving into a residence that is less expensive, and skipping your family vacation for a year or two.

Work a second job and sell items you don't need. Perhaps you can find an additional job to get your down payment money. You can also get creative about the items you may be able to put up for sale. You may have desirable items you can put up for sale on an online auction, or household goods for a garage or tag sale. You might also look into what any investments you have will bring if sold.

Tap into retirement funds. Check the parameters of your particular program. Many people get down payment money from withdrawing funds from their Individual Retirement Accounts or taking money out of 401(k) programs. Be sure you are clear about any penalties, the effect this will have on your taxes, and repayment terms.

Ask for assistance from generous members of your family. First-time buyers somtimes get help with their down payment assistance from thoughtful parents and other family members who may be prepared to help them get into their first home. Your family members may be willing to help you reach the milestone of owning your first home.

Research housing finance agencies. Provisional mortgate loan programs are given to buyers in certain circumstances, like low income homebuyers or people looking to renovating houses in a targeted area, among others. With the help of a housing finance agency, you may get a below market interest rate, down payment help and other benefits. These kinds of agencies may help eligible buyers with a reduced rate of interest, get you your down payment, and provide other benefits. The main goal of non-profit housing finance agencies is to boost the purchase of homes in targeted places.

Research no-down and low-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 a critical role in helping low and moderate-income Americans get mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals who wish to get home financing. FHA aids first-time homebuyers and others who might not be eligible for a traditional mortgage by themselves, by providing mortgage insurance to lenders. Interest rates for an FHA mortgage are normally the going interest rate, but the down payment for an FHA loan will be less than those of conventional loans. The required down payment can go as low as 3 percent while the closing costs could be included in the mortgage.

• VA mortgage loans

  VA loans are backed by the U.S. Department of Veterans Affairs. Veterens and service people can get a VA loan, which generally offers a reasonable rate of interest, no down payment, and reduced closing costs. While the loans are not actually provided by the VA, the department certifies borrowers by issuing eligibility certificates.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes at the same time as the first. In most cases the first mortgage covers 80% of the purchase amount and the "piggyback" is for 10%. Instead of the traditional 20 percent down payment, the buyer will just have to cover the remaining 10 percent.

• Carry-Back loans

  With a carry-back mortgage, the you borrow part of the seller's home equity.. In this scenario, you would borrow the majority of the purchase price from a traditional mortgage lender and borrow the remaining amount from the seller. Generally, this form of second mortgage will have a higher rate of interest.

Want to discuss down payments? Call us at 7193576601.