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Your Down Payment

Many buyers qualify for several different kinds of mortgages, but they can't afford a large down payment. Get started here

Slash the budget and build up savings. Be on the look-out for ways to reduce your expenses to set aside funds for a down payment. Also, you can look into bank programs in which a specific portion of your paycheck is automatically placed into savings each pay period. Some practical ways to put together funds include moving into a residence that is less expensive, and skipping a year's vacation.

Work a second job and sell items you do not need. Try to get an additional job. This can be exhausting, but the temporary trial can help you get your down payment. In addition, you can make an exhaustive list of items you may be able to sell. Broken gold jewelry can be sold at local jewelers. A closetful of small items might add up to a fair amount at a garage or tag sale. You might also research what your investments could bring if sold.

Tap into your retirement funds. Investigate the parameters of your specific program. Many homebuyers get down payment money from withdrawing funds from Individual Retirement Accounts or borrowing from 401(k) plans. Be sure you understand the tax ramifications, your obligation for repaying funds, and possible early withdrawal penalties.

Ask for assistance from generous members of your family. First-time homebuyers are often lucky enough to receive help with their down payment assistance from giving family members who may be eager to help get them in their own home. Your family members may be pleased at the chance to help you reach the goal of buying your first home.

Learn about housing finance agencies. These types of agencies offer special loan programs for moderate and low income borrowers, buyers interested in sprucing up a home in a specific part of the city, and additional particular kinds of buyers as defined by the finance agency. With the help of a housing finance agency, you probably will be given a below market interest rate, down payment assistance and other incentives. Housing finance agencies can assist you with a lower interest rate, help with your down payment, and offer other assistance. The main goal of not-for-profit housing finance agencies is to promote the purchase of homes in specific areas.

Learn about low-down and no-down mortgages.

• FHA loans

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in assisting low and moderate-income families qualify for mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers who wish to get mortgages. FHA helps first-time buyers and others who might not be able to qualify for a conventional mortgage on their own, by providing mortgage insurance to the lenders. Interest rates with an FHA loan typically feature the market interest rate, but the down payment with an FHA loan will be smaller than those of conventional loans. The down payment may be as low as three percent and the closing costs can be financed in the mortgage loan.

• VA mortgage loans

  VA loans are backed by the U.S. Department of Veterans Affairs. Service persons and veterans can receive a VA loan, which typically offers a reasonable fixed interest rate, no down payment, and minimal closing costs. Although the VA does not issue the mortgage loans, it does issue a certificate of eligibility to qualify for a VA mortgage.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes with the first. Generally the first mortgage is for 80% of the cost of the home and the "piggyback" is for 10%. The homebuyer pays the remaining 10%, instead of come up with the usual 20% down payment.

• Carry-Back loans

  With a carry-back mortgage, the seller loans you part of his or her equity. You would borrow the largest portion of the purchase price from a traditional mortgage lender and borrow the remainder from the seller. Often, this kind of second mortgage has a higher rate of interest.

The satisfaction will be the same, no matter how you manage to pull together the down payment. Your new home will be worth it!

Need to talk about your down payment? Give us a call at (407) 898-7559.