Your Down Payment

Lots of buyers qualify for several different kinds of mortgages, but they can't afford a large down payment. We have a few ideas

Tighten your belt and save. Look for ways you can reduce your monthly expenses to save toward a down payment. Also, you can look into bank programs in which some of your take-home pay is automatically placed into savings every pay period. Some effective ways to build up funds include moving into a residence that is less expensive, and staying home for your vacation this year.

Work more and sell things you don't need. Maybe you can get a second job to get your down payment money. In addition, you can put together a comprehensive list of items you can sell. Broken gold jewelry can bring a good amount from local jewelers. A closetful of small things can add up to a nice sum at a garage or tag sale. You might also look into what any investments you hold may sell for.

Borrow from retirement funds. Research the details of your particular plan. Some people get down payment money by withdrawing from their IRAs or taking funds out of their 401(k) programs. You will need to make sure you are clear about any penalties, the effect this may have on income taxes, and repayment obligation.

Ask for a generous gift from your family. Many buyers somtimes receive down payment help from caring family members who may be eager to help them get into their first home. Your family members may be eager to help you reach the goal of owning your first home.

Contact housing finance agencies. Provisional mortgage programs are given to buyers in specific circumstances, such as low income homebuyers or future homeowners planning to remodel houses in a targeted neighborhood, among others. With the help of this kind of agency, you can receive an interest rate that is below market, down payment help and other benefits. Housing finance agencies can help you with a lower interest rate, get you your down payment, and provide other benefits. These non-profit programs were established to boost community in certain areas.

Explore no-down and low-down mortgage loans.

  • Federal Housing Administration (FHA) loans

    The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays a vital role in helping low and moderate-income buyers get mortgages. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA helps first-time homebuyers and others who may not be eligible for a conventional loan by themselves, by providing mortgage insurance to private lenders. Interest rates for an FHA loan are typically the current interest rate, while the down payment amounts with an FHA loan are lower than those of conventional loans. The down payment may go as low as three percent and the closing costs may be financed in the mortgage loan.

  • VA mortgage loans

    VA loans are backed by the Department of Veterans Affairs. Veterens and service people can benefit from a VA loan, which typically offers a low interest rate, no down payment, and limited closing costs. While the mortgage loans are not actually financed by the VA, the department certifies applicants by issuing eligibility certificates.

  • Piggy-back loans

    You may finance your down payment using a second mortgage that closes along with the first. Usually the piggyback loan takes care of 10 percent of the home's amount, while the first mortgage covers 80 percent. In contrast to the usual 20 percent down payment, the homebuyer just has to cover the remaining 10 percent.

  • Carry-Back loans

    In the case of a seller "carrying 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 lending institution and finance the remaining amount with the seller. Generally, this kind of second mortgage has higher interest.

No matter your strategy of pulling together your down payment, the thrill of living in your own home will be just as great!

Want to discuss your down payment? Call us: (800) 299-0270.

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