Your Down Payment
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Many buyers qualify for several different kinds of mortgages, but they don't have much to pay a down payment. Here are a few methods that will help you get together a down payment
Tighten your belt and save. Turn your budget upside-down to find extra money to save for your down payment. You could also try enrolling in an automatic savings plan at your bank to have a percentage of your pay automatically transferred into savings. Some effective strategies to save additional funds include moving into less expensive housing, and staying home for your family vacation this year.
Sell things you do not really need and find a second job. Perhaps you can get a second job to get your down payment money. In addition, you can put together a comprehensive inventory of things you may be able to sell. Broken gold jewelry can bring a good price from local jewelers. Multiple small items might add up to a nice sum at a garage or tag sale. You can also explore what your investments may sell for.
Borrow from your retirement funds. Research the specifics for your individual plan. It is possible to borrow money from a 401(k) for you down payment or withdraw from an Individual Retirement Account. Make sure you know about any penalties, the way this will affect on income taxes, and repayment terms.
Request a gift from family. Many buyers are often fortunate enough to get help with their down payment help from caring parents and other family members who may be eager to help them get into their own home. Your family members may be pleased to help you reach the goal of buying your first home.
Contact housing finance agencies. These agencies provide special mortgage loan programs- for low and moderate-income buyers, buyers with an interest in rehabilitating a residence within a targeted part of the city, and additional groups as defined by the finance agency. With the help of a housing finance agency, you may be given an interest rate that is below market, down payment help and other benefits. Housing finance agencies can help eligible homebuyers with a reduced rate of interest, get you your down payment, and provide other advantages. The central goal of non-profit housing finance agencies is boosting the purchase of homes in certain places.
Find out about low-down and no-down mortgage loan programs.
- FHA mortgages
The Federal Housing Administration (FHA), which is inside the U.S. Department of Housing and Urban Development (HUD), plays an important part in helping low and moderate-income individuals qualify for mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals in qualifying for mortgages.
FHA helps first-time homebuyers and others who would not be able to qualify for a conventional loan by themselves, by offering mortgage insurance to lenders.
Interest rates for an FHA loan typically feature the current interest rate, but the down payment requirements with an FHA loan will be less than those of conventional loans. Closing costs can be covered by the mortgage, while your down payment may be as low as 3% of the purchase price.
- VA mortgages
VA loans are guaranteed by the Department of Veterans Affairs. Veterens and service people are eligible for a VA loan, which typically offers a competitive interest rate, no down payment, and minimal closing costs. While the mortgage loans are not actually issued by the VA, the office certifies applicants by providing eligibility certificates.
- Piggy-back loans
You can finance your down payment with a second mortgage that closes at the same time as the first. Most of the time, the first mortgage covers 80% of the purchase amount and the "piggyback" is for 10%. The homebuyer pays the remaining 10%, rather than having to pull together the typical 20% down payment.
- Carry-Back loans
We a seller carries back a second mortgage, the seller loans you part of his or her home equity. You would finance the majority of the purchase price with a traditional mortgage lender and borrow the remaining amount from the seller. Typically you'll pay a slightly higher rate on the loan financed by the seller.
The satisfaction will be the same, no matter which method you use to come up with your down payment. Your new home will be well worth it!
Need to talk about the best options for down payments? Give us a call: 970-513-0934.