Your Down Payment

Many buyers qualify for various loan programs, but they can't afford a large down payment. Do you want to look into getting a new house, but aren't sure how you should put together your down payment?

Slash the budget and build up savings. Scrutinize your budget to uncover extra money to save for your down payment. You might also try enrolling in an automatic savings plan at your bank to automatically have a predetermined amount from your paycheck transferred into a savings account. You could look into some big expenses in your budget that you can do without, or reduce, at least temporarily. Here are a couple of examples: you may decide to move into less expensive housing, or skip a family vacation.

Sell things you don't need and find a part-time job. Maybe you can find an additional job to get your down payment money. You can also get serious about the possessions you really need and the things you migh be able to put up for sale. Multiple small items might add up to a fair amount at a garage or tag sale. You might also explore what your investments will sell for.

Borrow from retirement funds. Check the parameters of your particular program. Many homebuyers get down payment money by withdrawing funds from Individual Retirement Accounts or getting money out of their 401(k) programs. You will need to ensure you are clear about any penalties, the way this may affect on your income taxes, and repayment terms.

Request a generous gift from your family. Many buyers are often lucky enough to receive help with their down payment help from giving parents and other family members who may be eager to help get them in their first home. Your family members may be pleased to help you reach the milestone of owning your own home.

Research housing finance agencies. Special loan programs are offered to buyers in specific circumstances, like low income homebuyers or buyers looking to improve houses in a certain place, among others. Financing with this type of agency, you can receive a below market interest rate, down payment assistance and other perks. Housing finance agencies may help eligible homebuyers with a lower rate of interest, get you your down payment, and provide other advantages. The main goal of not-for-profit housing finance agencies is to boost the purchase of homes in certain parts of the city.

Learn about low-down and no-down mortgages.

  • FHA mortgages

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in assisting low to moderate-income Americans qualify for mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals in getting mortgage loans. FHA helps first-time homebuyers and others who might not be able to qualify for a conventional mortgage loan on their own, by offering mortgage insurance to lenders. Down payment sums for FHA loans are smaller than those with typical mortgages, although these mortgages have average rates of interest. The down payment can go as low as three percent while the closing costs could be financed in the mortgage loan.

  • VA mortgages

    VA loans are guaranteed by the Department of Veterans Affairs. Veterens and service people can receive a VA loan, which generally offers a low fixed rate of interest, no down payment, and minimal closing costs. Although the VA does not actually issue the loans, it does issue a certificate of eligibility to qualify for a VA loan.

  • Piggy-back loans

    You can fund a down payment with a second mortgage that closes with the first. Usually the piggyback loan takes care of 10 percent of the home's amount, and the first mortgage covers 80 percent. The borrower covers the remaining 10%, rather than putting the typical 20% down payment.

  • Carry-Back loans

    In a "carry back" situation, the seller agrees to lend you some of his own equity to help you with your down payment funds. The buyer funds the highest percentage of the purchase price with a traditional mortgage program and finances the remaining funds with the seller. Often, this kind of second mortgage has higher interest.

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

Need to talk about down payments? Call us: 562 320-0510.

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