Your Down Payment

Many buyers can qualify for various loan programs, but they can't afford a large down payment. Want to look into getting a new home, but don't know how to put together your down payment?

Tighten your belt and save. Turn your budget upside-down to uncover ways you can cut expenses to go toward your down payment. You also could enroll in an automatic savings plan at your bank to automatically have a specific amount from your paycheck deposited into savings. You could look into some big expenses in your spending history that you can live without, or reduce, at least temporarily. For example, you might decide to move into less expensive housing, or skip a vacation.

Work more and sell items you don't need. Try to find an additional job. This can be rough, but the temporary trial can provide your down payment money. Additionally, you can put together a comprehensive inventory of items you can sell. Unworn gold jewelry can be sold at local jewelry stores. You might have desirable items you can sell at an online auction, or household items for a garage or tag sale. You might also look into what any investments you have could bring if sold.

Borrow from retirement funds. Check the provisions of your retirement program. Many homebuyers get down payment money from withdrawing funds from IRAs or getting funds out of 401(k) programs. Make sure you are knowledgable about any penalties, the effect this will have on your taxes, and repayment obligation.

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

Research housing finance agencies. Provisional mortgate loan programs are given to homebuyers in specific circumstances, like low income homebuyers or people planning to renovating houses in a certain place, among others. With the help of this type of agency, you may get a below market interest rate, down payment help and other advantages. These kinds of agencies may help you with a lower rate of interest, get you your down payment, and offer other benefits. These non-profit programs to boost the value of homes in particular places.

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

  • FHA mortgages

    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 to moderate-income individuals get mortgages. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals who need to get mortgage loans. FHA offers mortgage insurance to the private lenders, helping the buyers to become eligible for a home loan. Down payment sums for FHA loans are below those for conventional mortgages, even though these mortgages have average interest rates. The required down payment can be as low as 3 percent and the closing costs can be financed in the mortgage.

  • VA mortgages

    With a guarantee from the Department of Veterans Affairs, a VA loan is offered to veterens and service people. This particular loan does not require a down payment, has mimimal closing costs, and offers a competitive interest rate. While it's true that the mortgage loans aren't actually financed by the VA, the office verfifies borrowers by issuing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that you close along with the first. Often the first mortgage covers 80% of the purchase price and the "piggyback" is for 10%. Instead of the traditional 20 percent down payment, the buyer will just have to cover the remaining 10 percent.

  • Carry-Back loans

    In the option of a seller "carrying back a second mortgage," the you borrow part of the seller's home equity.. The buyer funds most of the purchase price with a traditional mortgage program and finances the remaining funds with the seller. Generally, this form of second mortgage will have higher interest.

The feeling of accomplishment will be the same, no matter how you manage to get together the down payment. Your brand new home will be well worth it!

Want to discuss down payment options? Give us a call at 214-869-7339.