Your Down Payment

Lots of buyers qualify for several different kinds of mortgages, but they don't have much to put up a down payment. Do you want to buy a new house, but aren't sure how to get together a down payment?

Slash your budget and build up savings. Turn your budget inside out to find extra money to save for your down payment. There are bank programs in which some of your take-home pay is automatically transferred into a savings account every pay period. Some practical ways to build up funds include moving into housing that is less expensive, and staying local for your vacation for a year or two.

Work a second job and sell things you don't need. Look for an additional job. This can be rough, but the temporary trial can provide your down payment money. You can also seriously consider the possessions you actually need and the things you can put up for sale. A closetful of small things can add up to a nice sum at a garage or tag sale. Also, you can consider selling any investments you own.

Tap into your retirement funds. Research the details of your individual plan. You may borrow money from a 401(k) for you down payment or perform a withdrawal from an Individual Retirement Account. You will want to ensure you are clear about any penalties, the way this may affect on income taxes, and repayment terms.

Ask for help from family members. First-time homebuyers somtimes receive down payment help from caring family members who are eager to help get them in their first home. Your family members may be happy at the chance to help you reach the goal of buying your first home.

Learn about housing finance agencies. Provisional mortgage loans are extended to buyers in specific situations, like low income buyers or future homeowners planning to remodel houses in a particular part of town, among others. Financing through a housing finance agency, you can get an interest rate that is below market, down payment help and other perks. Housing finance agencies may assist eligible buyers with a lower rate of interest, help with your down payment, and provide other advantages. These non-profit programs exist to build up the value of homes in specific areas.

Explore no-down and low-down mortgages.

  • Federal Housing Administration (FHA) mortgage loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a vital part in aiding low and moderate-income families get mortgage loans. 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 typical mortgage loan by themselves, by offering mortgage insurance to private lenders. Interest rates for an FHA loan generally feature the current interest rate, but the down payment with an FHA loan are lower than those of conventional loans. Closing costs can be financed in the mortgage, and the down payment can be as low as 3 percent of the total amount.

  • VA mortgage loans

    Guaranteed by the Department of Veterans Affairs, a VA loan qualifies service people and veterans. This special loan requires no down payment, has mimimal closing costs, and offers a competitive interest rate. Even though the VA does not finance the mortgages, it does issue a certificate of eligibility to qualify for a VA loan.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes at the same time as the first. Usually the piggyback loan takes care of 10 percent of the home's amount, while the first mortgage covers 80 percent. The homebuyer pays the remaining 10%, instead of putting the typical 20% down payment.

  • Carry-Back loans

    In the option of a seller "carrying back a second mortgage," the seller loans you part of his or her equity. The buyer funds the highest percentage of the purchase price with a traditional mortgage program and borrows the remaining funds from the seller. Generally, this kind of second mortgage will have higher interest.

The feeling of accomplishment will be the same, no matter which strategy you use to come up with your down payment. Your brand new home will be your reward!

Need to talk about down payments? Give us a call at (888) 299-4585.

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