Your Down Payment

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

Tighten your belt and save. Be on the look-out for ways you can reduce your expenditures to put away money for a down payment. You could also try enrolling in an automatic savings plan to have a portion of your pay automatically moved into a savings account. You might look into some big expenses in your spending history that you can give up, or reduce, at least temporarily. For example, you might decide to move into less expensive housing, or stay local for your annual vacation.

Work a second job and sell items you do not need. Maybe you can find a second job and build up your earnings. You can also seriously consider the possessions you really need and the items you can put up for sale. Multiple small things can add up to a fair amount at a garage or tag sale. You could also look into what any investments you have will sell for.

Tap into your retirement funds. Check the parameters of your retirement program. Some homebuyers get down payment money by withdrawing what they need from their IRAs or borrowing from their 401(k) plans. Be sure to ask your plan representative about the tax ramifications, repayment terms, and any early withdrawal penalties.

Ask for a generous gift from family. First-time buyers somtimes get down payment assistance from thoughtful parents and other family members who may be prepared to help them get into their own home. Your family members may be inclined to help you reach the goal of having your first home.

Research housing finance agencies. These types of agencies offer provisional mortgate loan programs- for low and moderate-income borrowers, buyers with an interest in remodeling a home in a specific part of the city, and other groups as specified by each finance agency. With the help of this type of agency, you probably will be given a below market interest rate, down payment help and other advantages. Housing finance agencies can help eligible homebuyers with a reduced rate of interest, help with your down payment, and offer other advantages. The principal mission of non-profit housing finance agencies is promoting the purchase of homes in certain places.

Learn about low-down and no-down mortgage loan programs.

  • FHA loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in helping low to moderate-income Americans qualify for mortgage loans. Part of the United States 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 traditional mortgage on their own, by providing mortgage insurance to the lenders. Down payment totals for FHA mortgages are below those for conventional mortgages, even though these mortgages hold average rates of interest. The down payment can be as low as 3 percent and the closing costs could be included in the mortgage loan.

  • VA mortgage loans

    With a guarantee from the Department of Veterans Affairs, a VA loan assists service people and veterans. This particular loan requires no down payment, has reduced closing costs, and offers a competitive rate of interest. Even though the mortgage loans aren't actually issued by the VA, the office certifies applicants by providing eligibility certificates.

  • Piggy-back loans

    You can fund a down payment using a second mortgage that closes with the first. Generally the first mortgage covers 80% of the cost of the home and the "piggyback" funds 10%. The borrower covers the remaining 10%, rather than needing to put together the typical 20% down payment.

  • Carry-Back loans

    With a carry-back mortgage, the seller loans you part of his or her home equity. The buyer funds the highest percentage of the purchase price with a traditional mortgage program and finances the remaining funds with the seller. Generally, this form of second mortgage has a higher rate of interest.

No matter your method of getting together your down payment, the satisfaction of living in your own home will be just as sweet!

Need to talk about down payments? Give us a call at 214-869-7339.