Your Down Payment
Many folks who would like to purchase a new house can easily qualify for several different kinds of mortgages, but they can't afford a large down payment. Want to buy a new house, but aren't sure how to get together your down payment?
Tighten your belt and save. Scrutinize your budget to find extra money to save for your down payment. You might also decide to enroll in an automatic savings plan to automatically have a set amount from your take-home pay transferred into savings. You would be wise to look into some big expenses in your spending history that you can do without, or reduce, at least temporarily. For example, you might decide to move into less expensive housing, or stay local for your vacation.
Sell items you do not need and get a second job. Try to get a second job. This can be exhausting, but the temporary trial can help you get your down payment. You can also get creative about the items you could be able to sell. Maybe you own collectibles you can sell at an auction website, or household goods for a tag or garage sale. You can also look into what any investments you hold could sell for.
Borrow from your retirement funds. Explore the specifics of your particular plan. Some homebuyers get down payment money from withdrawing what they need from IRAs or borrowing from their 401(k) plans. Make sure you know about any penalties, the way this will affect on income taxes, and repayment terms.
Ask for help from generous family members. Many homebuyers are often lucky enough to receive help with their down payment help from thoughtful family members who are able to help them get into their own home. Your family members may be inclined to help you reach the milestone of buying your own home.
Research housing finance agencies. These types of agencies offer special mortgage programs for moderate and low income homebuyers, buyers interested in remodeling a home within a specific part of the city, and additional groups as defined by the agency. Financing through a housing finance agency, you can be given an interest rate that is below market, down payment help and other advantages. These kinds of agencies may help eligible buyers with a lower interest rate, get you your down payment, and offer other benefits. The principal mission of not-for-profit housing finance agencies is boosting home ownership in certain areas.
Find out about low-down and no-down mortgages.
- FHA mortgage loans
The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in assisting low to moderate-income Americans qualify for mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals in qualifying for mortgages.
FHA helps first-time buyers and others who would not be eligible for a typical loan on their own, by offering mortgage insurance to the private lenders.
Interest rates with an FHA loan are generally the current interest rate, while the down payment amounts with an FHA mortgage will be lower than those of conventional loans. The required down payment may go as low as 3 percent while the closing costs can be covered by the mortgage loan.
- VA mortgage loans
VA loans are backed by the Department of Veterans Affairs. Veterens and service people can get a VA loan, which generally offers a competitive fixed rate of interest, no down payment, and minimal closing costs. While the mortgages aren't actually issued by the VA, the department certifies applicants by issuing eligibility certificates.
- Piggy-back loans
You can fund a down payment using a second mortgage that closes at the same time as the first. In most cases the first mortgage covers 80% of the cost of the home and the "piggyback" is for 10%. The homebuyer covers the remaining 10%, instead of putting the usual 20% down payment.
- Carry-Back loans
We a seller carries back a second mortgage, the seller loans you part of his or her equity. You would borrow the largest portion of the purchase price from a traditional mortgage lender and borrow the remainder from the seller. Generally, this kind of second mortgage has a higher rate of interest.
The satisfaction will be the same, no matter which strategy you use to come up with the down payment. Your new home will be your reward!
Want to discuss down payment options? Call us: (718) 639-9500.