Your Down Payment

Many people who would like to purchase a new home qualify for several different kinds of mortgages, but they don't have much to pay the standard down payment. Here are a few methods that will help you get together a down payment

Slash your budget and build up savings. Look for ways to reduce your expenses to put away money for a down payment. You might also decide to enroll in an automatic savings plan to automatically have a set amount from your take-home pay moved into your savings account. Some effective ways to build up funds include moving into housing that is less expensive, and staying home for your vacation for a year or two.

Sell items you don't need and get a part-time job. Maybe you can get an additional job and save your earnings. Additionally, you can make an exhaustive inventory of items you can sell. Unworn gold jewelry can bring a good amount from local jewelers. You may have desirable items you can put up for sale at an online auction, or quality household items for a garage or tag sale. Also, you might want to think about selling any investments you hold.

Borrow money from your retirement plan. Investigate the provisions of your retirement program. Some homebuyers get down payment money by withdrawing funds from their IRAs or borrowing from 401(k) programs. Make sure you understand about any penalties, the way this will affect on income taxes, and repayment obligation.

Ask for assistance from generous members of your family. Many homebuyers somtimes get down payment assistance from gracious parents and other family members who may be prepared to help get them in their own home. Your family members may be willing to help you reach the goal of buying your first home.

Research housing finance agencies. These agencies offer special mortgage loans for low and moderate-income homebuyers, buyers with an interest in sprucing up a house within a particular part of the city, and additional groups as specified by the finance agency. Working with a housing finance agency, you can receive a below market interest rate, down payment assistance and other advantages. These types of agencies can assist you with a reduced rate of interest, help with your down payment, and provide other benefits. These non-profit programs were formed to build up community in particular neighborhoods.

Find out about low-down and no-down mortgage loan programs.

  • FHA mortgage loans

    The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in assisting low and moderate-income individuals qualify for mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA helps first-time buyers and others who might not be able to qualify for a typical mortgage on their own, by offering mortgage insurance to lenders. Interest rates with an FHA mortgage are typically the current interest rate, but the down payment with an FHA mortgage are smaller than those of conventional loans. The down payment can go as low as 3 percent while the closing costs might be covered by the mortgage loan.

  • VA loans

    VA loans are guaranteed by the U.S. Department of Veterans Affairs. Veterens and service people can benefit from a VA loan, which generally offers a reasonable interest rate, no down payment, and limited closing costs. Even though the VA does not issue the mortgage loans, it does issue a certificate of eligibility to apply for a VA mortgage.

  • Piggy-back loans

    You may finance your down payment with a second mortgage that closes at the same time as the first. Generally the piggyback loan is for 10 percent of the home's amount, and the first mortgage covers 80 percent. The borrower covers the remaining 10%, instead of come up with the typical 20% down payment.

  • Carry-Back loans

    In a "carry back" mortgage, the seller agrees to loan you some of his home equity to help you get your down payment funds. The buyer finances most of the purchase price with a traditional mortgage program and borrows the remaining funds from the seller. Usually you will pay a slightly higher rate with the loan from the seller.

The feeling of accomplishment will be the same, no matter how you manage to come up with the down payment. Your new home will be worth it!

Want to discuss down payment options? Call us at 562 320-0510.

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