Your Down Payment

Many borrowers qualify for a loan, but they can't afford a large down payment. Get started here

Reduce expenses and save. Scrutinize your budget to find ways you can cut expenses to save for your down payment. You could also try enrolling in an automatic savings plan at your bank to have a portion of your pay automatically deposited into your savings account. You could look into some big expenses in your spending history that you can give up, or reduce, at least temporarily. Here are a couple of examples: you might decide to move into less expensive housing, or skip a family vacation.

Sell items you do not really need and get a second job. Maybe you can get an additional job and build up your earnings. In addition, you can put together an exhaustive inventory of items you may be able to sell. Broken gold jewelry can bring a good price from local jewelers. You might have desirable items you can put up for sale on an auction website, or household goods for a garage or tag sale. Also, you might want to think about selling any investments you own.

Borrow from a retirement plan. Research the specifics of your individual plan. Many people get down payment money from withdrawing from their IRAs or borrowing from 401(k) programs. Make sure you comprehend the tax consequences, repayment terms, and early withdrawal penalties.

Ask for assistance from family members. First-time buyers are sometimes lucky enough to receive help with their down payment help from gracious parents and other family members who are eager to help them get into their own home. Your family members may be happy at the chance to help you reach the goal of owning your own home.

Research housing finance agencies. These agencies provide special loan programs to moderate and low income buyers, buyers with an interest in rehabilitating a home 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 may be given a below market interest rate, down payment assistance and other perks. Housing finance agencies can help eligible homebuyers with a lower interest rate, get you your down payment, and provide other assistance. The primary purpose of not-for-profit housing finance agencies is build up residence ownership in specific areas.

Find out about low-down and no-down mortgage loans.

  • FHA loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a significant part in helping low and moderate-income Americans get mortgage loans. 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 would not be eligible for a traditional mortgage on their own, by offering mortgage insurance to the lenders. Interest rates for an FHA mortgage normally feature the market interest rate, while the down payment with an FHA loan will be less than those of conventional loans. The down payment may be as low as three percent while the closing costs might be packaged in the mortgage.

  • VA mortgage loans

    With a guarantee from the Department of Veterans Affairs, a VA loan assists service people and veterans. This specialized loan does not require a down payment, has mimimal closing costs, and provides a competitive interest rate. Even though the VA doesn't actually provide the mortgage loans, it does certify eligibility to apply for a VA loan.

  • Piggy-back loans

    You may fund your down payment using a second mortgage that closes along with the first. Usually the piggyback loan takes care of 10 percent of the home's price, and the first mortgage finances 80 percent. The borrower pays the remaining 10%, rather than having to pull together the typical 20% down payment.

  • Carry-Back loans

    In a "carry back" situation, the seller agrees to loan you some of his home equity to assist you with your down payment money. You would borrow the largest portion of the purchase price from a traditional lender and finance the remainder with the seller. Typically, this form of second mortgage has a higher rate of interest.

No matter how you gather your down payment, the thrill of owning your own home will be just as sweet!

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

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