Your Down Payment

Many people who are looking to buy a new home can qualify for various loan programs, but they can't afford a large down payment. Here are a few straightforward ways to get together a down payment

Slash your budget and build up savings. Look for ways to trim your monthly expenses to set aside funds for a down payment. There are bank programs in which some of your take-home pay is automatically placed into savings each pay period. Some practical methods to save additional funds include moving into a residence that is less expensive, and skipping your family vacation for a year or two.

Work a second job and sell items you do not need. Maybe you can get an additional job to get your down payment money. You can also get creative about the items you can sell. Maybe you have desirable items you can sell at an online auction, or quality household items for a tag or garage sale. Also, you can consider selling any investments you hold.

Borrow your down payment from your retirement plan. Research the details of your individual plan. You may borrow funds from a 401(k) for a down payment or withdraw from an IRA. Make sure you are knowledgable about any penalties, the effect this may have on your income taxes, and repayment terms.

Request a generous gift from your family. First-time homebuyers are sometimes fortunate enough to get help with their down payment help from gracious family members who are anxious to help get them in their first home. Your family members may be eager to help you reach the goal of having your own home.

Learn about housing finance agencies. Special mortgate loan programs are provided to homebuyers in specific circumstances, like low income homebuyers or people planning to renovating houses in a specific area, among others. With the help of this type of agency, you probably will be given a below market interest rate, down payment help and other perks. These kinds of agencies can assist you with a lower interest rate, help with your down payment, and provide other benefits. The principal purpose of not-for-profit housing finance agencies is boosting residential ownership in targeted parts of the city.

Explore no-down and low-down mortgage loan programs.

  • FHA loans

    The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays a critical role in aiding low and moderate-income Americans get mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA assists first-time homebuyers and others who would not be eligible for a typical mortgage by themselves, by providing mortgage insurance to the lenders. Down payment amounts for FHA mortgages are less than those for traditional mortgages, even though these loans have average rates of interest. The down payment may be as low as 3 percent while the closing costs can be covered by the mortgage loan.

  • VA mortgage loans

    Guaranteed by the Department of Veterans Affairs, a VA loan is offered to service people and veterans. This specialized loan requires no down payment, has limited closing costs, and provides a competitive rate of interest. While the VA doesn't actually provide the mortgages, it does certify eligibility to qualify for a VA loan.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes with the first. Generally the piggyback loan is for 10 percent of the purchase amount, while the first mortgage finances 80 percent. Instead of the usual 20 percent down payment, the homebuyer will just have to cover the remaining 10 percent.

  • Carry-Back loans

    With a carry-back mortgage, the you borrow a portion of the seller's home equity.. You would finance the largest portion of the purchase price with a traditional mortgage lender and finance the remaining amount with the seller. Usually this type of second mortgage will have a higher rate of interest.

No matter your method of putting together down payment funds, the satisfaction of reaching the goal of owning your own home will be just as sweet!

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

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