Your Down Payment

Lots of people who are looking to purchase a new home qualify for a mortgage loan, but they can't afford a large down payment. Here are a few straightforward methods that will help you put together your down payment

Tighten your belt and save. Scrutinize your budget to find extra money to go toward your down payment. There are bank programs in which a specific portion of your take-home pay is automatically deposited into a savings account each pay period. Some practical ways to build up funds include moving into housing that is less expensive, and skipping your family vacation for a year or two.

Work more and sell items you do not need. Look for a second job. This can be exhausting, but the temporary trial can provide your down payment money. In addition, you can put together an exhaustive list of items you can sell. Unworn gold jewelry can be sold at local jewelry stores. Maybe you own desirable items you can sell on an auction website, or household goods for a tag or garage sale. You could also research what your investments may sell for.

Borrow from your retirement funds. Check the provisions of your specific program. Many homebuyers get down payment money from withdrawing from their Individual Retirement Accounts or pulling money out of 401(k) plans. Make sure to find out about the tax consequences, repayment terms, and any penalties for withdrawing early.

Ask for a generous gift from family. Many buyers somtimes receive help with their down payment help from caring parents and other family members who are eager to help get them in their first home. Your family members may be inclined to help you reach the milestone of buying your own home.

Research housing finance agencies. These types of agencies offer special mortgage loans to low and moderate-income borrowers, buyers with an interest in rehabilitating a home in a targeted area, and additional groups as defined by the finance agency. Working through a housing finance agency, you may get a below market interest rate, down payment assistance and other perks. These types of agencies may help you with a lower interest rate, help with your down payment, and offer other benefits. These non-profit agencies exist to promote community in certain places.

Learn about low-down and no-down mortgage loan programs.

  • Federal Housing Administration (FHA) loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a critical role in assisting low and moderate-income individuals qualify for mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers who wish to get mortgage loans. FHA aids first-time buyers and others who may not be eligible for a conventional loan on their own, by offering mortgage insurance to private lenders. Down payment requirements for FHA loans are lower than those for conventional mortgage loans, even though these mortgages have current interest rates. The down payment can go as low as 3 percent and the closing costs might be financed in the mortgage.

  • VA mortgages

    Guaranteed by the Department of Veterans Affairs, a VA loan qualifies veterens and service people. This particular loan requires no down payment, has mimimal closing costs, and provides a competitive interest rate. While the mortgage loans aren't actually financed by the VA, the department verfifies applicants by providing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes at the same time as the first. In most cases the first mortgage covers 80% of the cost of the home and the "piggyback" funds 10%. Instead of the usual 20 percent down payment, the buyer just has to pull together the remaining 10 percent.

  • Carry-Back loans

    We a seller carries back a second mortgage, the seller loans you part of his or her home equity. In this scenario, you would borrow the majority of the purchase price from a traditional lender and finance the remainder with the seller. Usually this type of second mortgage has higher interest.

The satisfaction will be the same, no matter which strategy you use to pull together your down payment. Your new home will be your reward!

Want to discuss down payments? Call us: 562 320-0510.

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