Your Down Payment

Lots of people who are looking to purchase a new house can easily qualify for various loan programs, but they don't have a large sum of cash to pay the standard down payment. Do you want to buy a new house, but aren't sure how you should get together a down payment?

Slash your budget and build up savings. Scrutinize your budget to discover extra money to go toward your down payment. You might also decide to enroll in an automatic savings plan to automatically have a set amount from your take-home pay deposited into savings. Some effective ways to build up funds include moving into less expensive housing, and skipping your family vacation for a year or two.

Work more and sell things you do not need. Perhaps you can get an additional job and build up your earnings. Additionally, you can put together a comprehensive inventory of things you can sell. Unused gold jewelry can bring a good price from local jewelry stores. You may own collectibles you can put up for sale on an online auction, or household goods for a tag or garage sale. You can also explore what your investments will bring if sold.

Borrow from retirement funds. Check the parameters of your retirement program. Some homebuyers get down payment money from withdrawing what they need from their Individual Retirement Accounts or getting money out of 401(k) programs. You will need to ensure you understand about any penalties, the effect this may have on taxes, and repayment obligation.

Request a gift from family. Many homebuyers are often lucky enough to receive down payment help from caring parents and other family members who are able to help them get into their first home. Your family members may be inclined to help you reach the goal of having your own home.

Contact housing finance agencies. These types of agencies provide special loan programs for moderate and low income buyers, buyers interested in sprucing up a home in a particular area, and other particular types of buyers as specified by the finance agency. Financing with a housing finance agency, you may get a below market interest rate, down payment help and other perks. Housing finance agencies can assist eligible buyers with a lower interest rate, help with your down payment, and offer other assistance. The primary purpose of non-profit housing finance agencies is boosting the purchase of homes in specific places.

Find out about low-down and no-down mortgages.

  • Federal Housing Administration (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 aiding low and moderate-income buyers get mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA provides mortgage insurance to private lenders, enabling buyers who may not be eligible for a typical mortgage, to get a mortgage. Interest rates with an FHA mortgage usually feature the current interest rate, but the down payment amounts for an FHA loan are below those of conventional loans. Closing costs may be included in the mortgage, and the down payment can be as low as 3% of the purchase price.

  • VA mortgage loans

    VA loans are guaranteed by the Department of Veterans Affairs. Veterens and service people can get a VA loan, which typically offers a competitive fixed interest rate, no down payment, and limited closing costs. While the VA doesn't actually issue the mortgages, it does issue a certificate of eligibility to apply for a VA loan.

  • Piggy-back loans

    You can finance your down payment through a second mortgage that closes at the same time as the first. Usually the piggyback loan is for 10 percent of the purchase price, while the first mortgage covers 80 percent. The borrower covers the remaining 10%, rather than putting the typical 20% down payment.

  • Carry-Back loans

    In the option of the seller "carrying back a second mortgage," the you borrow a portion of the seller's home equity.. In this scenario, you would borrow the majority of the purchase price from a traditional lending institution and finance the remaining amount with the seller. Typically, this form of second mortgage has higher interest.

The feeling of accomplishment will be the same, no matter which method you use to come up with the down payment. Your brand new home will be well worth it!

Want to discuss your down payment? Call us at (888) 299-4585.

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