Your Down Payment

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Many borrowers qualify for a loan, but they don't have a lot of money to pay the standard down payment. Do you want to buy a new house, but aren't sure how to put together a down payment?

Slash the budget and build up savings. Turn your budget inside out to discover ways you can cut expenses to save for your down payment. Also, you can look into bank programs through which some of your take-home pay is automatically deposited into savings each pay period. You might look into some big expenses in your budget that you can do without, or trim, at least temporarily. For example, you may decide to move into less expensive housing, or skip a vacation.

Sell things you do not really need and get a part-time job. Maybe you can get an additional job and save your earnings. Additionally, you can put together an exhaustive list of items you can sell. Unused gold jewelry can bring a good price from local jewelers. A closet full of 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.

Borrow money from your retirement plan. Explore the details for your individual plan. It is possible to borrow money from a 401(k) plan for you down payment or withdraw from an IRA. Be sure to ask your plan representative about the tax consequences, your obligation for repaying funds, and possible penalties for withdrawing early.

Request a generous gift from family. Many buyers are sometimes lucky enough to get help with their down payment assistance from caring parents and other family members who may be anxious to help them get into their own home. Your family members may be happy at the chance to help you reach the goal of owning your own home.

Research housing finance agencies. Provisional mortgage programs are offered to homebuyers in certain circumstances, such as low income purchasers or people looking to renovating houses in a particular place, among others. With the help of this type of agency, you may get a below market interest rate, down payment assistance and other incentives. Housing finance agencies may help you with a reduced interest rate, get you your down payment, and provide other advantages. The central mission of non-profit housing finance agencies is to boost the purchase of homes in particular parts of the city.

Research no-down and low-down mortgage loans.

  • FHA mortgages

    The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in assisting low and moderate-income Americans qualify for mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA offers mortgage insurance to private lenders, making the buyers eligible for a loan. Down payment amounts for FHA mortgages are lower than those of traditional mortgages, even though these mortgages have current rates of interest. The down payment can go as low as three percent and the closing costs might be included in the mortgage.

  • VA mortgages

    VA loans are backed by the Department of Veterans Affairs. Veterens and service people qualify for a VA loan, which usually offers a competitive fixed rate of interest, no down payment, and reduced closing costs. Although the VA does not finance the loans, it does certify eligibility to qualify for a VA loan.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that you close along with the first. Generally the first mortgage is for 80% of the purchase price and the "piggyback" is for 10%. Instead of the traditional 20 percent down payment, the homebuyer will just have to pull together the remaining 10 percent.

  • Carry-Back loans

    In a "carry back" agreement, the seller agrees to loan you some of his own equity to assist you with your down payment money. The buyer finances the majority of the purchase price with a traditional mortgage program and borrows the remainder from the seller. Typically, this kind of second mortgage has higher interest.

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

Need to talk about down payment options? Give us a call: 918-633-9916.

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