Your Down Payment

Lots of borrowers can qualify for a loan, but they don't have much to pay a down payment. Do you want to buy a new house, but aren't sure how to put together your down payment?

Reduce expenses and save. Look for ways you can trim your expenses to set aside money for a down payment. You also could enroll in an automatic savings plan to automatically have a predetermined portion of your paycheck transferred into savings. Some effective ways to build up funds include moving into a residence that is less expensive, and staying home for your family vacation this year.

Sell things you don't need and get a part-time job. Maybe you can get a second job to get your down payment money. You can also seriously consider the possessions you actually need and the items you may be able to sell. Multiple small things could add up to a nice sum at a garage or tag sale. Also, you might want to look into selling any investments you hold.

Borrow your down payment from a retirement plan. Explore the details for your particular plan. Many homebuyers get down payment money by withdrawing funds from their IRAs or getting money out of 401(k) programs. Make sure you are clear about any penalties, the way this will affect on taxes, and repayment terms.

Ask for a gift from family. First-time homebuyers somtimes receive down payment assistance from giving parents and other family members who may be willing to help get them in their first home. Your family members may be inclined to help you reach the goal of owning your first home.

Learn about housing finance agencies. These types of agencies extend special mortgage programs to moderate and low income homebuyers, buyers with an interest in sprucing up a house in a specific part of the city, and other groups as defined by each agency. Working with this kind of agency, you may receive an interest rate that is below market, down payment help and other incentives. These types of agencies can assist you with a lower rate of interest, help with your down payment, and provide other assistance. The central mission of non-profit housing finance agencies is boosting home ownership in targeted areas.

Learn about low-down and no-down mortgages.

  • FHA mortgage 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 Americans get mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA aids first-time buyers and others who might not be eligible for a conventional loan on their own, by offering mortgage insurance to the private lenders. Interest rates for an FHA loan usually feature the current interest rate, while the down payment with an FHA mortgage will be below those of conventional loans. The down payment can go as low as three percent while the closing costs can be financed in the mortgage loan.

  • VA mortgage loans

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

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes with the first. In most cases the first mortgage is for 80% of the purchase amount and the "piggyback" funds 10%. The borrower pays the remaining 10%, rather than putting the usual 20% down payment.

  • Carry-Back loans

    With a carry-back mortgage, the seller loans you part of his or her home equity. In this scenario, you would finance the largest portion of the purchase price with a traditional lender and finance the remainder with the seller. Typically, this type of second mortgage will have a higher rate of interest.

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

Need to talk about your down payment? Call us: 972.798.2110.