Your Down Payment

Lots of buyers can qualify for various loan programs, but they can't afford a large down payment. Get started here

Slash the budget and build up savings. Scrutinize the budget to find ways you can cut expenses to go toward your down payment. You could also try enrolling in an automatic savings plan to automatically have a specific portion of your take-home pay transferred into your savings account. Some effective ways to save additional funds include moving into housing that is less expensive, and staying home for your vacation this year.

Sell things you don't need and get a second job. Maybe you can get an additional job to get your down payment money. In addition, you can make a comprehensive list of items you can sell. Unused gold jewelry can bring a good price from local jewelers. A closetful of small items may add up to a fair amount at a garage or tag sale. You might also research what your investments could sell for.

Borrow from your retirement funds. Explore the specifics of your particular plan. Many homebuyers get down payment money by withdrawing from IRAs or getting funds out of their 401(k) programs. You will need to be sure you understand about any penalties, the way this may affect on income taxes, and repayment terms.

Ask for assistance from members of your family. Many buyers somtimes receive help with their down payment assistance from caring family members who are willing to help get them in their first home. Your family members may be willing to help you reach the goal of having your own home.

Contact housing finance agencies. These agencies offer provisional mortgate loan programs to moderate and low income borrowers, buyers with an interest in rehabilitating a residence within a targeted area, and additional specific types of buyers as defined by each finance agency. Working with a housing finance agency, you can get a below market interest rate, down payment assistance and other advantages. These types of agencies may help you with a lower interest rate, get you your down payment, and offer other assistance. These non-profit programs exist to boost the value of homes in particular places.

Research no-down and low-down mortgage loans.

  • Federal Housing Administration (FHA) mortgages

    The Federal Housing Administration (FHA), which is inside the U.S. Department of Housing and Urban Development (HUD), plays a critical part in assisting low and moderate-income buyers qualify for mortgages. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA offers mortgage insurance to private lenders, making the buyers eligible for a loan. Down payment requirements for FHA loans are smaller than those with traditional mortgages, even though these mortgages come with average interest rates. The required down payment can go as low as three percent while the closing costs can be financed in the mortgage.

  • VA mortgages

    VA loans are backed by the U.S. Department of Veterans Affairs. Veterens and service people can get a VA loan, which typically offers a low fixed interest rate, no down payment, and reduced closing costs. While the VA does not actually finance the mortgages, it does certify eligibility to apply for a VA mortgage.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes along with the first. Most of the time, the piggyback loan takes care of 10 percent of the home's price, and the first mortgage finances 80 percent. The homebuyer pays the remaining 10%, rather than come up with the usual 20% down payment.

  • Carry-Back loans

    In a "carry back" agreement, the seller agrees to loan you part of his own equity to help you get your down payment funds. In this scenario, you would finance the largest portion of the purchase price with a traditional lending institution and borrow the remaining amount from the seller. Typically you'll pay a somewhat higher rate on the loan financed by the seller.

The feeling of accomplishment will be the same, no matter which method you use to get together your down payment. Your brand new home will be worth it!

Want to discuss the best options for down payments? Call us: 562 320-0510.

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