Your Down Payment

Lots of borrowers can easily qualify for several different kinds of mortgages, but they don't have a lot of money to pay the standard down payment. Do you want to look into getting a new home, but don't know how you should get together your down payment?

Slash the budget and build up savings. Scrutinize your budget to find ways you can cut expenses to save for your down payment. There are bank programs through which a specific portion of your take-home pay is automatically transferred into savings each pay period. Some practical strategies to build up funds include moving into a residence that is less expensive, and staying local for your vacation for a year or two.

Work more and sell items you do not need. Look for a second job. This can be rough, but the temporary trial can provide your down payment money. You can also get creative about the things you might be able to sell. Maybe you own collectibles you can sell at an auction website, or household items for a tag or garage sale. You could also explore what any investments you hold may sell for.

Tap into retirement funds. Research the specifics of your particular plan. Some people get down payment money by withdrawing from IRAs or pulling money out of their 401(k) programs. You will need to make sure you understand about any penalties, the way this could affect on your taxes, and repayment obligation.

Ask for assistance from members of your family. Many homebuyers sometimes get down payment assistance from giving parents and other family members who are willing to help get them in their first home. Your family members may be pleased to help you reach the milestone of buying your own home.

Learn about housing finance agencies. Special mortgage programs are provided to buyers in certain situations, like low income buyers or people planning to renovating houses in a specific part of town, among others. With the help of a housing finance agency, you probably will get a below market interest rate, down payment help and other incentives. These kinds of agencies can help eligible homebuyers with a lower interest rate, get you your down payment, and offer other benefits. These non-profit agencies to build up community in particular areas.

Explore no-down and low-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 role in aiding low and moderate-income individuals qualify for mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers in getting mortgages. FHA assists first-time buyers and others who may not be able to qualify for a conventional loan by themselves, by providing mortgage insurance to lenders. Interest rates for an FHA mortgage typically feature the current interest rate, but the down payment amounts with an FHA mortgage are below those of conventional loans. Closing costs can be covered by the mortgage, and the down payment may be as low as 3% of the purchase price.

• VA loans

  With a guarantee from the Department of Veterans Affairs, a VA loan assists service people and veterans. This special loan does not require a down payment, has limited closing costs, and offers a competitive rate of interest. While the loans aren't actually financed by the VA, the department verifies borrowers by issuing eligibility certificates.

• Piggy-back loans

  A piggy-back loan is a second mortgage that you close with the first. Most of the time, the first mortgage is for 80% of the purchase price and the "piggyback" funds 10%. The homebuyer pays the remaining 10%, rather than come up with the usual 20% down payment.

• Carry-Back loans

  In a "carry back" situation, the seller commits to loan you part of his home equity to help you get your down payment funds. The buyer finances most of the purchase price with a traditional mortgage program and borrows the remaining funds from the seller. Usually you'll pay a somewhat higher interest rate with the loan from the seller.

No matter how you gather your down payment money, the thrill of reaching the goal of owning your own home will be just as sweet!