Your Down Payment

Many borrowers can easily qualify for several different kinds of mortgages, 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 a down payment?

Tighten your belt and save. Be on the look-out for ways you can trim your expenses to set aside funds for a down payment. Also, you can look into bank programs in which a specific portion of your take-home pay is automatically placed into a savings account each pay period. Some effective methods to put together funds include moving into housing that is less expensive, and skipping a year's vacation.

Sell things you don't need and find a second job. Perhaps you can get a second job to get your down payment money. Additionally, you can make a comprehensive list of items you may be able to sell. Unworn gold jewelry can bring a good amount from local jewelry stores. Multiple small things can add up to a fair amount at a garage or tag sale. You might also research what your investments may bring if sold.

Tap into retirement funds. Investigate the provisions of your particular program. Many homebuyers get down payment money from withdrawing what they need from their Individual Retirement Accounts or pulling funds out of their 401(k) programs. Make sure you understand the tax ramifications, repayment terms, and any early withdrawal penalties.

Ask for assistance from generous members of your family. Many buyers somtimes receive down payment help from gracious family members who are eager to help them get into their own home. Your family members may be eager to help you reach the milestone of owning your first home.

Learn about housing finance agencies. Special mortgage loans are extended to homebuyers in specific situations, like low income purchasers or future homeowners looking to renovating homes in a targeted place, among others. With the help of this type of agency, you probably will receive an interest rate that is below market, down payment assistance and other benefits. These kinds of agencies can help eligible buyers with a lower rate of interest, help with your down payment, and provide other advantages. The principal purpose of non-profit housing finance agencies is to boost the purchase of homes in specific parts of the city.

Research no-down and low-down mortgages.

  • FHA loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a vital role in aiding low and moderate-income individuals qualify for mortgage loans. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA aids first-time buyers and others who may not be eligible for a conventional mortgage loan by themselves, by providing mortgage insurance to lenders. Interest rates with an FHA loan usually feature the market interest rate, but the down payment requirements for an FHA mortgage are smaller than those of conventional loans. Closing costs may be financed within the mortgage, and your down payment could be as low as 3 percent of the total amount.

  • VA mortgages

    VA loans are backed by the Department of Veterans Affairs. Veterens and service people are eligible for a VA loan, which usually offers a low fixed interest rate, no down payment, and minimal closing costs. While the mortgages don't originate from the VA, the office certifies applicants by issuing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that you close at the same time as the first. Most of the time, the piggyback loan takes care of 10 percent of the purchase amount, while the first mortgage finances 80 percent. The homebuyer pays the remaining 10%, instead of putting the typical 20% down payment.

  • Carry-Back loans

    In a "carry back" mortgage, the seller agrees to lend you a portion of his own equity to assist you with your down payment money. The buyer funds the majority of the purchase price with a traditional mortgage program and finances the remaining funds with the seller. Typically you'll pay a slightly higher rate with the loan from the seller.

No matter your method of pulling together down payment funds, the thrill of owning your own home will be just as great!

Need to talk about down payments? Give us a call at 562 320-0510.

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