Your Down Payment

Lots of borrowers qualify for various loan programs, but they can't afford a large down payment. Want to buy a new house, but don't know how to get together a down payment?

Tighten your belt and save. Look for ways to reduce your expenditures to set aside funds for a down payment. There are bank programs through which some of your take-home pay is automatically deposited into a savings account each pay period. Some practical methods to save additional funds include moving into less expensive housing, and skipping a year's vacation.

Work more and sell things you do not need. Maybe you can get a second job and save your earnings. You can also get serious about the possessions you actually need and the items you can put up for sale. Maybe you own desirable items you can put up for sale on an online auction, or quality household items for a garage or tag sale. You might also explore what any investments you own could bring if sold.

Borrow from retirement funds. Investigate the parameters of your specific plan. You may pull out money from a 401(k) plan for a down payment or perform a withdrawal from an Individual Retirement Account. Be sure to ask your plan representative about the tax consequences, your obligation for repaying funds, and any penalties for withdrawing early.

Request a gift from your family. First-time buyers are often lucky enough to receive down payment assistance from caring parents and other family members who are eager to help get them in their first home. Your family members may be willing to help you reach the goal of owning your own home.

Learn about housing finance agencies. These agencies provide special mortgage programs for moderate and low income borrowers, buyers with an interest in remodeling a house in a targeted area, and other specific types of buyers as defined by each finance agency. With the help of a housing finance agency, you can get an interest rate that is below market, down payment assistance and other incentives. These kinds of agencies may assist eligible homebuyers with a lower interest rate, get you your down payment, and provide other advantages. These non-profit programs were established to boost the value of homes in specific places.

Research no-down and low-down mortgage loans.

  • FHA mortgages

    The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays a critical role in aiding low to moderate-income individuals qualify for mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA offers mortgage insurance to private lenders, helping the buyers to become eligible for a mortgage. Down payment requirements for FHA mortgages are below those with traditional mortgages, although these mortgages have current rates of interest. Closing costs can be financed in the mortgage, and your down payment may be as low as 3 percent of the purchase price.

  • VA mortgages

    VA loans are backed by the Department of Veterans Affairs. Service persons and veterans can get a VA loan, which typically offers a low interest rate, no down payment, and reduced closing costs. Although the VA does not finance the mortgage loans, it does certify eligibility to qualify for a VA mortgage.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes along with the first. Usually the piggyback loan is for 10 percent of the home's amount, and the first mortgage covers 80 percent. The homebuyer covers the remaining 10%, instead of needing to put together the typical 20% down payment.

  • Carry-Back loans

    In a "carry back" mortgage, the seller commits to loan you a portion of his own equity to assist you with your down payment funds. The buyer finances most of the purchase price through a traditional mortgage program and finances the remaining funds with the seller. Typically you'll pay a slightly higher rate with the loan from the seller.

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

Need to talk about the best options for down payments? Call us: (407) 898-7559.

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