Putting Together Your Down Payment

Many folks who would like to buy a new house qualify for a mortgage loan, but they don't have a lot of money to pay the standard down payment. Here's where to get started

Cut expenses and save. Scrutinize the budget to discover extra money to go toward your down payment. Also, you can look into bank programs in which a specific portion of your take-home pay 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 move into less expensive housing, or stay close to home for your annual vacation.

Work a second job and sell things you do not need. Look for an additional job. This can be rough, but the temporary difficulty can help you get your down payment. You can also get creative about the things you can sell. Maybe you own collectibles you can put up for sale on an auction website, or quality household items for a garage or tag sale. Also, you can look into selling any investments you own.

Tap into your retirement funds. Research the details for your individual plan. You may borrow funds from a 401(k) plan for you down payment or withdraw from an Individual Retirement Account. Be sure you understand about any penalties, the way this will affect on income taxes, and repayment obligation.

Ask for help from family members. Many homebuyers are often fortunate enough to get help with their down payment help from gracious parents and other family members who may be prepared to help them get into their own home. Your family members may be eager to help you reach the goal of buying your first home.

Research housing finance agencies. These agencies extend special mortgage programs to low and moderate-income buyers, buyers with an interest in sprucing up a residence within a targeted part of the city, and additional groups as defined by the finance agency. With the help of a housing finance agency, you probably will be given an interest rate that is below market, down payment assistance and other benefits. These kinds of agencies may help you with a lower interest rate, get you your down payment, and offer other benefits. These non-profit agencies were formed to promote home ownership in particular areas.

Explore no-down and low-down mortgages.

  • FHA mortgages

    The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays a vital role in aiding low and moderate-income individuals qualify for mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids homebuyers who wish to get mortgage loans. FHA aids first-time buyers and others who would not be able to qualify for a traditional mortgage on their own, by providing mortgage insurance to the private lenders. Interest rates with an FHA loan usually feature the current interest rate, but the down payment for an FHA mortgage are lower than those of conventional loans. Closing costs may be covered by the mortgage, while the down payment may be as low as 3% of the total.

  • VA mortgage loans

    VA loans are guaranteed by the U.S. Department of Veterans Affairs. Veterens and service people can receive a VA loan, which generally offers a competitive rate of interest, no down payment, and limited closing costs. Even though the mortgage loans don't originate from the VA, the department certifies applicants by issuing eligibility certificates.

  • Piggy-back loans

    You may finance your down payment using a second mortgage that closes with the first. Usually the piggyback loan takes care of 10 percent of the purchase amount, and the first mortgage finances 80 percent. The homebuyer pays the remaining 10%, rather than come up with the typical 20% down payment.

  • Carry-Back loans

    With a carry-back mortgage, the seller loans you part of his or her equity. The buyer funds most of the purchase price with a traditional mortgage program and finances the remaining funds with the seller. Typically you'll pay a slightly higher rate with the loan financed by the seller.

The feeling of accomplishment will be the same, no matter how you manage to put together your down payment. Your new home will be worth it!

Need to talk about the best options for down payments? Call us: 8668408745.

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Carter Financial Solutions

2291 W. March Ln Suite A100
Stockton, CA 95207