Your Down Payment
Let's talk about your down payment. Strategies and sources for money.
Lots of folks who would like to buy a new home can qualify for a mortgage loan, but they can't afford a large down payment. Here are a few straightforward methods that will help you put together your down payment:
Slash your budget and build up savings. Turn your budget upside-down to find ways you can cut expenses to go toward your down payment. You might also decide to enroll in an automatic savings plan to have a portion of your pay automatically moved into savings. You might look into some big expenses in your budget that you can do without, or trim, at least temporarily. For example, you might move into less expensive housing, or stay local for your annual vacation.
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One of the most well-hidden facts about home buying, is that there are people/institutions/agencies that are giving away money to first-time home buyers.
Call ‘em crazy, but they do. Here’s a CLEARINGHOUSE website for people looking for down payment assistance.
Also visit downpayment resource.com
One of the more high-profile programs for home buyers is the Daisy Down Payment and Closing Cost Assistance Program.
Sell items you do not really need and find a part-time job. Perhaps you can get a second job and save your earnings. In addition, you can make an exhaustive list of things you can sell. Unused gold jewelry can be sold at local jewelers. A closet full of small things can add up to a fair amount at a garage or tag sale. You can also research what your investments could sell for.
Tap into your retirement funds. Research the specifics for your particular plan. It is possible to pull out funds from a 401(k) for you down payment or get a withdrawal from an Individual Retirement Account. Be sure you understand the tax ramifications, your obligation for repaying funds, and any early withdrawal penalties.
Ask for help from members of your family. First-time homebuyers are often fortunate enough to get down payment help from caring family members who may be prepared to help get them in their own home. Your family members may be eager to help you reach the milestone of having your own home.
Contact housing finance agencies. These types of agencies offer provisional mortgage loans for moderate and low income homebuyers, buyers with an interest in sprucing up a residence within a targeted area, and additional particular kinds of buyers as specified by the finance agency. Working through a housing finance agency, you probably will be given a below market interest rate, down payment help and other perks. These types of agencies can help you with a lower interest rate, get you your down payment, and provide other advantages. These non-profit programs exist to boost community in particular areas.
Learn about low-down and no-down mortgages.
Federal Housing Administration (FHA) mortgage loans
The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in helping low to moderate-income families qualify for mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals who wish to qualify for mortgage loans. FHA assists first-time buyers and others who may not be eligible for a typical loan on their own, by providing mortgage insurance to lenders. Interest rates for an FHA mortgage are normally the current interest rate, but the down payment amounts for an FHA loan are lower than those of conventional loans. Closing costs may be financed in the mortgage, and the down payment may be as low as 3 percent of the total.
VA loans are backed by the Department of Veterans Affairs. Veterens and service people qualify for a VA loan, which usually offers a low rate of interest, no down payment, and minimal closing costs. While it's true that the mortgage loans aren't actually issued by the VA, the department certifies applicants by providing eligibility certificates.
A piggy-back loan is a second mortgage that closes along with the first. Most of the time, the piggyback loan is for 10 percent of the purchase amount, and the first mortgage finances 80 percent. The homebuyer covers the remaining 10%, rather than putting the typical 20% down payment.
In a "carry back" mortgage, the seller agrees to loan you a piece of his home equity to help you with your down payment money. The buyer funds most of the purchase price through a traditional mortgage program and finances the remaining funds with the seller. Often, this form of second mortgage has a higher rate of interest.
No matter how you gather down payment funds, the satisfaction of living in your own home will be just as great!