Your Down Payment

Many buyers qualify for various loan programs, but they don't have much to put up a down payment. Below are a few methods that will help you put together a down payment

Slash your budget and build up savings. Scrutinize the budget to discover extra money to save for your down payment. There are bank programs in which a specific portion of your take-home pay is automatically placed into savings every pay period. You might look into some big expenses in your budget that you can give up, or reduce, at least temporarily. Here are a couple of examples: you may decide to move into less expensive housing, or stay local for your vacation.

Work a second job and sell things you do not need. Try to get a second job. This can be exhausting, but the temporary trial can provide your down payment money. In addition, you can put together an exhaustive inventory of items you can sell. Unworn gold jewelry can bring a good price from local jewelry stores. Multiple small items may add up to a fair amount at a garage or tag sale. You could also research what your investments will bring if sold.

Tap into your retirement funds. Research the specifics for your particular plan. You can borrow funds from a 401(k) for a down payment or make a withdrawal from an IRA. Be sure to ask your plan representative about the tax ramifications, your obligation for repayment, and any early withdrawal penalties.

Ask for help from generous members of your family. Many homebuyers somtimes receive help with their down payment help from thoughtful parents and other family members who are eager to help get them in their own home. Your family members may be eager to help you reach the milestone of buying your first home.

Research housing finance agencies. These agencies offer provisional mortgate loan programs to low and moderate-income buyers, buyers interested in sprucing up a home within a particular area, and additional groups as defined by each finance agency. Working through this kind of agency, you probably will get a below market interest rate, down payment help and other perks. These types of agencies can help you with a lower interest rate, help with your down payment, and provide other advantages. The main purpose of not-for-profit housing finance agencies is promoting residence ownership in certain places.

Research no-down and low-down mortgage loan programs.

  • FHA mortgage 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 families qualify for mortgages. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA assists first-time buyers and others who may not be able to qualify for a conventional mortgage loan on their own, by offering mortgage insurance to the lenders. Down payment sums for FHA loans are smaller than those of conventional mortgages, although these loans have average rates of interest. Closing costs might be covered by the mortgage, and your down payment might be as low as 3% of the purchase price.

  • VA mortgages

    With a guarantee from the Department of Veterans Affairs, a VA loan assists service people and veterans. This particular loan does not require a down payment, has reduced closing costs, and provides a competitive rate of interest. While it's true that the mortgages don't originate from the VA, the office certifies borrowers by providing eligibility certificates.

  • Piggy-back loans

    You can finance a down payment using a second mortgage that closes at the same time as the first. Usually the piggyback loan is for 10 percent of the home's amount, and the first mortgage covers 80 percent. The borrower covers the remaining 10%, instead of come up with the typical 20% down payment.

  • Carry-Back loans

    With a carry-back mortgage, the you borrow a portion of the seller's home equity.. In this scenario, you would borrow the largest portion of the purchase price from a traditional mortgage lender and finance the remainder with the seller. Usually you'll pay a somewhat higher interest rate with the loan from the seller.

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

Want to discuss the best options for down payments? Call us at (407) 898-7559.

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