08:30 – 5:00

Monday to Friday

5001 California Avenue, Suite 200

661-324-AGAPE

Your Bakersfield Mortgage Professional

October 22, 2017

08:30 – 5:00

Monday to Friday

5001 California Avenue, Suite 200

661-324-AGAPE

Your Down Payment

Putting Together Your Down Payment

Lots of people who would like to buy a new house qualify for several different kinds of mortgages, but they can’t afford a large down payment. Below are a few ways to put together your down payment

Tighten your belt and save. Look for ways you can trim your expenditures to save toward a down payment. You might also try enrolling in an automatic savings plan at your bank to automatically have a specific portion of your paycheck moved into your savings account. Some practical strategies to build up funds include moving into less expensive housing, and skipping a year’s vacation.

Sell things you don’t need and get a part-time job. Try to get a second job. This can be exhausting, but the temporary difficulty can provide your down payment money. In addition, you can make a comprehensive inventory of items you can sell. Broken gold jewelry can be sold at local jewelry stores. You may have collectibles you can sell on an online auction, or quality household goods for a garage or tag sale. Also, you might want to consider selling any investments you own.

Borrow money from your retirement plan. Explore the details for your individual plan. Many homebuyers get down payment money by withdrawing what they need from IRAs or taking money out of their 401(k) plans. Be sure you understand the tax consequences, repayment terms, and any penalties for withdrawing early.

Ask for help from family members. First-time buyers are sometimes fortunate enough to receive down payment assistance from thoughtful family members who may be willing to help get them in their first home. Your family members may be eager to help you reach the goal of buying your first home.

Research housing finance agencies. These types of agencies offer special mortgate loan programs- for low and moderate-income borrowers, buyers with an interest in remodeling a residence within a specific area, and other groups as defined by each agency. Financing through a housing finance agency, you probably will get an interest rate that is below market, down payment assistance and other advantages. Housing finance agencies may assist eligible buyers with a lower interest rate, get you your down payment, and offer other benefits. These non-profit programs to promote home ownership in certain areas.

Learn about low-down and no-down mortgages.

  • FHA mortgagesThe Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a critical role in assisting low to moderate-income individuals qualify for mortgage loans. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals in getting mortgages. FHA provides mortgage insurance to the private lenders, helping the buyers to become eligible for a mortgage. Interest rates with an FHA mortgage are usually the current interest rate, but the down payment with an FHA loan are below those of conventional loans. The down payment can go as low as 3 percent while the closing costs could be covered by the mortgage.
  • VA mortgage loansVA loans are guaranteed by the Department of Veterans Affairs. Service persons and veterans can qualify for a VA loan, which usually offers a competitive rate of interest, no down payment, and minimal closing costs. Even though the VA does not provide the mortgage loans, it does certify eligibility to apply for a VA mortgage.
  • Piggy-back loansYou can fund your down payment through a second mortgage that closes with the first. Generally the piggyback loan takes care of 10 percent of the home’s price, while the first mortgage finances 80 percent. The homebuyer covers the remaining 10%, rather than putting the typical 20% down payment.
  • Carry-Back loansWith a carry-back mortgage, the seller loans you part of his or her home equity. You would borrow the majority of the purchase price from a traditional mortgage lending institution and finance the remaining amount with the seller. Typically, this kind of second mortgage will have higher interest.

No matter your strategy of pulling together your down payment, the satisfaction of owning your own home will be just as great!

Want to discuss down payment options? Give us a call: 661.324.2427.

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