Your Down Payment
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Lots of buyers can easily qualify for several different kinds of mortgages, but they don't have much to put up a down payment. Do you want to look into getting a new house, but don't know how to get together your down payment?
Reduce expenses and save. Turn your budget inside out to discover ways you can cut expenses to save for your down payment. There are bank programs in which a portion of your paycheck is automatically placed into a savings account every pay period. You could look into some big expenses in your spending history that you can give up, or reduce, at least temporarily. Here are a couple of examples: you may decide to move into less expensive housing, or stay close to home for your family vacation.
Work a second job and sell things you don't need. Perhaps you can find a second job to get your down payment money. In addition, you can make an exhaustive list of items you can sell. Unused gold jewelry can be sold at local jewelry stores. Multiple small items could add up to a nice sum at a garage or tag sale. You can also research what your investments will bring if sold.
Borrow funds from a retirement plan. Explore the details for your individual plan. You may borrow funds from a 401(k) plan for a down payment or withdraw from an IRA. Be sure to find out about the tax consequences, repayment terms, and penalties for withdrawing early.
Ask for assistance from members of your family. Many buyers sometimes receive help with their down payment help from caring parents and other family members who are willing to help get them in their first home. Your family members may be willing to help you reach the goal of buying your first home.
Learn about housing finance agencies. These agencies offer provisional mortgage loan programs- for moderate and low income borrowers, buyers with an interest in remodeling a house in a targeted area, and additional specific types of buyers as defined by each agency. Financing with this type of agency, you probably will be given a below market interest rate, down payment help and other incentives. These types of agencies can help you with a reduced rate of interest, help with your down payment, and offer other benefits. The main mission of non-profit housing finance agencies is to boost the purchase of homes in certain places.
Find out about low-down and no-down mortgages.
- Federal Housing Administration (FHA) loans
The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays a critical role in helping low to moderate-income families qualify for mortgages. 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, making the buyers eligible for a mortgage loan. Interest rates with an FHA loan are usually the market interest rate, but the down payment with an FHA loan will be smaller than those of conventional loans. Closing costs may be covered by the mortgage, while your down payment could be as low as 3 percent of the purchase price.
- VA mortgages
VA loans are guaranteed by the Department of Veterans Affairs. Service persons and veterans are eligible for a VA loan, which typically offers a low interest rate, no down payment, and reduced closing costs. Although the VA does not provide the mortgages, it does issue a certificate of eligibility to apply for a VA loan.
- Piggy-back loans
You may finance a down payment with a second mortgage that closes at the same time as the first. Generally the piggyback loan takes care of 10 percent of the purchase amount, while the first mortgage finances 80 percent. The borrower pays the remaining 10%, rather than putting the typical 20% down payment.
- Carry-Back loans
In a "carry back" mortgage, the seller commits to loan you a portion of his home equity to help you get your down payment money. The buyer finances the majority of the purchase price with a traditional mortgage program and finances the remaining funds with the seller. Often, this type of second mortgage has a higher rate of interest.
The satisfaction will be the same, no matter how you manage to come up with your down payment. Your new home will be your reward!
Need to talk about down payments? Give us a call: 276-782-1677.