Your Down Payment
Many borrowers can qualify for several different kinds of mortgages, but they can't afford a large down payment. We have a few suggestions
Slash the budget and build up savings. Scrutinize your budget to find extra money to go toward your down payment. Also, you can look into bank programs through which a portion of your paycheck is automatically deposited into savings each pay period. Some effective methods to save additional funds include moving into less expensive housing, and skipping your vacation for a year or two.
Sell things you do not really need and get a part-time job. Maybe you can get a second job and save your earnings. Additionally, you can put together an exhaustive list of items you may be able to sell. Unworn gold jewelry can be sold at local jewelers. Multiple small things may add up to a fair amount at a garage or tag sale. You can also research what your investments may bring if sold.
Borrow funds from your retirement plan. Check the provisions of your retirement plan. It is possible to take out money from a 401(k) for you down payment or get a withdrawal from an IRA. Be sure you understand about any penalties, the effect this will have on your taxes, and repayment obligation.
Ask for assistance from members of your family. First-time buyers are often fortunate enough to receive down payment help from giving family members who are prepared to help them get into their first home. Your family members may be pleased at the chance to help you reach the goal of having your first home.
Contact housing finance agencies. These agencies provide special mortgate loan programs- for moderate and low income homebuyers, buyers with an interest in remodeling a residence in a targeted area, and other particular types of buyers as specified by each finance agency. Working with a housing finance agency, you may get an interest rate that is below market, down payment help and other advantages. Housing finance agencies can assist you with a lower interest rate, get you your down payment, and provide other advantages. The central mission of non-profit housing finance agencies is to promote residential ownership in particular areas.
Research no-down and low-down mortgage loans.
- FHA mortgage loans
The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a vital role in helping low to moderate-income individuals get mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals in getting home financing.
FHA provides mortgage insurance to the private lenders, enabling homebuyers who might not be eligible for a typical mortgage loan, to obtain a mortgage.
Down payment amounts for FHA loans are smaller than those of typical mortgages, although these mortgages hold current interest rates. Closing costs might be financed in the mortgage, and your down payment may be as low as 3% of the total amount.
- VA loans
Guaranteed by the Department of Veterans Affairs, a VA loan qualifies veterens and service people. This special loan does not require a down payment, has limited closing costs, and provides the advantage of a competitive rate of interest. Although the mortgages aren't actually provided by the VA, the department verfifies borrowers by providing eligibility certificates.
- Piggy-back loans
You can finance a down payment with a second mortgage that closes with the first. Generally the first mortgage covers 80% of the cost of the home and the "piggyback" funds 10%. In contrast to the traditional 20 percent down payment, the buyer will just have to cover the remaining 10 percent.
- Carry-Back loans
In a "carry back" mortgage, the seller agrees to loan you part of his own equity to help you get your down payment funds. The buyer finances most of the purchase price through a traditional mortgage program and borrows the remainder from the seller. Usually you will pay a somewhat higher rate with the loan from the seller.
No matter how you gather your down payment money, the thrill of reaching the goal of living in your own home will be just as sweet!
Need to talk about down payment options? Call us: (718) 477-4405.