Your Down Payment

Many borrowers can qualify for several different kinds of mortgages, but they can't afford a large down payment. Want to look into getting a new home, but aren't sure how you should get together your down payment?

Slash your budget and build up savings. Look for ways to trim your monthly expenditures to put away money for a down payment. You might also try enrolling in an automatic savings plan to automatically have a set amount from your take-home pay moved into savings. Some effective approaches to save additional funds include moving into less expensive housing, and staying local for your family vacation for a year or two.

Work more and sell items you don't need. Try to get a second job. This can be exhausting, but the temporary trial can help you get your down payment. Additionally, you can make a comprehensive inventory of things you may be able to sell. Unused gold jewelry can bring a good amount from local jewelers. A closetful of small things may add up to a fair amount at a garage or tag sale. Also, you might want to consider selling any investments you own.

Borrow from retirement funds. Research the details for your individual plan. You may borrow money from a 401(k) plan for a down payment or make a withdrawal from an Individual Retirement Account. Make sure to learn about the tax ramifications, repayment terms, and possible penalties for withdrawing early.

Ask for help from generous members of your family. First-time homebuyers somtimes get down payment help from thoughtful parents and other family members who may be able to help get them in their first home. Your family members may be willing to help you reach the milestone of owning your own home.

Research housing finance agencies. These types of agencies provide provisional mortgage programs to moderate and low income borrowers, buyers with an interest in rehabilitating a house within a particular area, and additional groups as defined by each finance agency. Working through this kind of agency, you may get an interest rate that is below market, down payment assistance and other advantages. Housing finance agencies may help eligible buyers with a lower rate of interest, get you your down payment, and offer other advantages. The main mission of non-profit housing finance agencies is to promote the purchase of homes in certain places.

Explore 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 significant part in aiding low and moderate-income Americans qualify for mortgages. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals in qualifying for mortgages. FHA aids first-time buyers and others who would not be able to qualify for a traditional mortgage on their own, by providing mortgage insurance to the private lenders. Interest rates for an FHA loan typically feature the going interest rate, but the down payment amounts with an FHA mortgage will be below those of conventional loans. The down payment can go as low as 3 percent and the closing costs could be financed in the mortgage.

  • VA mortgages

    VA loans are guaranteed by the U.S. Department of Veterans Affairs. Veterens and service people can benefit from a VA loan, which usually offers a low rate of interest, no down payment, and limited closing costs. Although the VA doesn't provide the mortgage loans, it does certify eligibility to qualify for a VA mortgage.

  • Piggy-back loans

    You may fund your down payment using a second mortgage that closes at the same time as the first. In most cases the first mortgage is for 80% of the purchase price and the "piggyback" funds 10%. The homebuyer pays the remaining 10%, instead of come up with the usual 20% down payment.

  • Carry-Back loans

    With a carry-back mortgage, the seller loans you part of his or her equity. The buyer finances the majority of the purchase price through a traditional mortgage program and borrows the remaining funds from the seller. Usually you will pay a somewhat higher rate on the loan from the seller.

The satisfaction will be the same, no matter how you manage to pull together your down payment. Your brand new home will be worth it!

Need to talk about down payments? Give us a call at (303) 228-2254.

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