Your Down Payment

Lots of folks who are looking to purchase a new house can qualify for various loan programs, but they don't have a large sum of cash to put up the standard down payment. Want to look into getting a new house, but aren't sure how to get together a down payment?

Slash the budget and build up savings. Look for ways to trim your monthly expenditures to save toward a down payment. You might also decide to enroll in an automatic savings plan to have a percentage of your pay automatically transferred into a savings account. Some effective strategies to save additional funds include moving into a residence that is less expensive, and skipping a year's vacation.

Work a second job and sell things you do not need. Try to get a second job. This can be exhausting, but the temporary trial can provide your down payment money. You can also get creative about the items you may be able to put up for sale. Maybe you own desirable items you can put up for sale on an online auction, or quality household goods for a garage or tag sale. You might also explore what any investments you hold could bring if sold.

Borrow from a retirement plan. Investigate the parameters of your particular plan. Some people get down payment money from withdrawing funds from their Individual Retirement Accounts or pulling funds out of their 401(k) programs. Make sure to learn about the tax consequences, your obligation for repaying funds, and early withdrawal penalties.

Ask for assistance from members of your family. Many buyers somtimes get down payment assistance from caring parents and other family members who may be prepared to help get them in their first home. Your family members may be eager to help you reach the goal of buying your first home.

Research housing finance agencies. These types of agencies offer provisional loan programs to low and moderate-income homebuyers, buyers interested in renovating a residence in a particular area, and additional groups as defined by each finance agency. With the help of a housing finance agency, you probably will get a below market interest rate, down payment help and other incentives. These kinds of agencies can help eligible homebuyers with a lower interest rate, get you your down payment, and offer other advantages. The main purpose of non-profit housing finance agencies is promoting home ownership in targeted areas.

Learn about low-down and no-down mortgage loans.

  • Federal Housing Administration (FHA) mortgage loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in helping low and moderate-income buyers qualify for mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers who need to qualify for mortgages. FHA provides mortgage insurance to private lenders, enabling homebuyers who might not qualify for a typical mortgage loan, to receive a mortgage. Interest rates with an FHA mortgage generally feature the market interest rate, while the down payment requirements for an FHA loan will be below those of conventional loans. Closing costs might be financed in the mortgage, and the down payment could be as low as 3 percent of the total.

  • VA mortgage loans

    VA loans are backed by the U.S. Department of Veterans Affairs. Veterens and service people can benefit from a VA loan, which typically offers a reasonable fixed interest rate, no down payment, and minimal closing costs. Although the VA doesn't issue the mortgages, it does certify eligibility to apply for a VA mortgage.

  • Piggy-back loans

    You can finance your down payment through a second mortgage that closes at the same time as the first. Usually the piggyback loan is for 10 percent of the purchase price, while the first mortgage finances 80 percent. In contrast to the usual 20 percent down payment, the homebuyer just has to cover the remaining 10 percent.

  • Carry-Back loans

    In a "carry back" situation, the seller agrees to loan you some of his own equity to help you with your down payment money. You would borrow the majority of the purchase price from a traditional lending institution and finance the remaining amount with the seller. Usually this kind of second mortgage will have a higher rate of interest.

The feeling of accomplishment will be the same, no matter how you manage to come up with the down payment. Your brand new home will be well worth it!

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

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