Your Down Payment

Many buyers can easily qualify for various loan programs, but they don't have a lot of money to put up a down payment. Do you want to look into getting a new home, but don't know how to put together a down payment?

Slash your budget and build up savings. Turn your budget upside-down to discover extra money to save for your down payment. You might also try enrolling in an automatic savings plan to have a percentage of your payroll automatically deposited into your savings account. Some effective strategies to build up funds include moving into less expensive housing, and staying home for your family vacation this year.

Work more and sell items you don't need. Try to get a second job. This can be exhausting, but the temporary difficulty can provide your down payment money. You can also get serious about the possessions you actually need and the items you can sell. Multiple small things might add up to a nice sum at a garage or tag sale. Also, you might want to think about selling any investments you own.

Tap into your retirement funds. Research the details of your individual plan. Some people get down payment money by withdrawing funds from their Individual Retirement Accounts or getting funds out of their 401(k) plans. Be sure you understand the tax consequences, your obligation for repaying the money, and any penalties for withdrawing early.

Request a generous gift from your family. First-time homebuyers somtimes receive help with their down payment assistance from gracious parents and other family members who are able to help get them in their first home. Your family members may be eager to help you reach the goal of buying your first home.

Contact housing finance agencies. These types of agencies offer special mortgate loan programs to moderate and low income borrowers, buyers interested in renovating a home within a targeted area, and other groups as defined by the agency. Financing through a housing finance agency, you can get an interest rate that is below market, down payment help and other incentives. These types of agencies may help you with a reduced rate of interest, get you your down payment, and offer other benefits. These non-profit agencies exist to boost community in particular places.

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

  • FHA loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a significant role in assisting low to moderate-income families get mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids homebuyers who need to get home financing. FHA offers mortgage insurance to the private lenders, enabling buyers who will not qualify for a conventional loan, to receive a mortgage. Down payment totals for FHA loans are below those of traditional mortgage loans, although these loans have average rates of interest. The down payment may go as low as 3 percent while the closing costs might be financed in the mortgage.

  • VA loans

    VA loans are guaranteed by the Department of Veterans Affairs. Veterens and service people qualify for a VA loan, which usually offers a competitive rate of interest, no down payment, and limited closing costs. Although the VA doesn't provide the mortgages, it does issue a certificate of eligibility to apply for a VA loan.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that you close at the same time as the first. In most cases the first mortgage covers 80% of the purchase price and the "piggyback" funds 10%. Rather than the usual 20 percent down payment, the homebuyer will just have to pull together the remaining 10 percent.

  • Carry-Back loans

    With a carry-back mortgage, the seller loans you part of his or her equity. The buyer funds the majority of the purchase price through a traditional mortgage program and finances the remaining funds with the seller. Generally, this type of second mortgage has higher interest.

The satisfaction will be the same, no matter how you manage to come up with the down payment. Your new home will be worth it!

Want to discuss the best options for down payments? Call us: (718) 639-9500.

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