Your Down Payment

Lots of buyers qualify for several different kinds of mortgages, but they can't afford a large down payment. Here's where you start

Tighten your belt and save. Be on the look-out for ways to trim your expenditures to set aside money for a down payment. There are bank programs in which a portion of your take-home pay is automatically deposited into savings every pay period. Some practical ways to build up funds include moving into housing that is less expensive, and skipping your vacation for a year or two.

Sell items you don't really need and find a part-time job. Maybe you can get a second job to get your down payment money. You can also get creative about the things you can put up for sale. Multiple small things could add up to a nice sum at a garage or tag sale. You can also explore what any investments you own will bring if sold.

Borrow from your retirement funds. Check the parameters of your retirement program. You can borrow money from a 401(k) for a down payment or withdraw from an IRA. Make sure you comprehend the tax consequences, your obligation for repaying funds, and any penalties for withdrawing early.

Ask for assistance from generous family members. First-time homebuyers somtimes get down payment help from gracious parents and other family members who may be willing to help get them in their first home. Your family members may be happy at the chance to help you reach the milestone of buying your own home.

Research housing finance agencies. These agencies offer provisional mortgage loans for moderate and low income borrowers, buyers interested in renovating a house within a specific area, and other groups as specified by the finance agency. Working with this type of agency, you may get a below market interest rate, down payment help and other advantages. These types of agencies can help eligible homebuyers with a reduced rate of interest, get you your down payment, and offer other assistance. The main goal of not-for-profit housing finance agencies is to promote residential ownership in specific parts of the city.

Explore no-down and low-down mortgage loans.

  • FHA mortgages

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in aiding low to moderate-income Americans get mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA helps first-time homebuyers and others who would not be able to qualify for a typical mortgage loan by themselves, by providing mortgage insurance to private lenders. Interest rates with an FHA mortgage typically feature the market interest rate, while the down payment for an FHA loan are less than those of conventional loans. Closing costs can be covered by the mortgage, while your down payment can be as low as 3% of the purchase price.

  • VA loans

    VA loans are guaranteed by the U.S. 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 reduced closing costs. While it's true that the mortgages aren't actually financed by the VA, the office verfifies applicants by providing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes with the first. Generally the piggyback loan is for 10 percent of the purchase amount, and the first mortgage finances 80 percent. In contrast to the traditional 20 percent down payment, the buyer just has to pull together the remaining 10 percent.

  • Carry-Back loans

    In a "carry back" situation, the seller commits to lend you some of his own equity to help you get your down payment funds. The buyer funds most of the purchase price through a traditional mortgage program and borrows the remainder from the seller. Usually you will pay a somewhat higher rate with the loan financed by the seller.

The satisfaction will be the same, no matter how you manage to come up with the down payment. Your new home will be your reward!

Need to talk about your down payment? Call us: (407) 898-7559.

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