Your Down Payment

Lots of buyers qualify for various loan programs, but they can't afford a large down payment. Do you want to look into getting a new home, but aren't sure how you should get together your down payment?

Tighten your belt and save. Turn your budget upside-down to uncover ways you can cut expenses to save for your down payment. There are bank programs through which a portion of your take-home pay is automatically transferred into savings each pay period. You might look into some big expenses in your spending history that you can do without, or reduce, at least temporarily. For example, you might decide to move into less expensive housing, or stay local for your family vacation.

Work more and sell items you do not need. Try to get an additional job. This can be rough, but the temporary difficulty can provide your down payment money. You can also seriously consider the possessions you actually need and the items you can sell. You may own collectibles you can sell at an auction website, or household goods for a tag or garage sale. Also, you can think about selling any investments you own.

Tap into retirement funds. Investigate the parameters of your retirement program. You may borrow funds from a 401(k) plan for a down payment or make a withdrawal from an Individual Retirement Account. Make sure you understand the tax ramifications, your obligation for repayment, and early withdrawal penalties.

Ask for assistance from generous family members. Many buyers somtimes get help with their down payment help from gracious family members who may be able to help get them in their first home. Your family members may be inclined to help you reach the milestone of owning your own home.

Research housing finance agencies. These agencies offer provisional mortgage programs to moderate and low income borrowers, buyers with an interest in remodeling a home in a specific part of the city, and other specific types of buyers as specified by the finance agency. Working through this kind of agency, you may get a below market interest rate, down payment help and other benefits. Housing finance agencies can help you with a reduced rate of interest, help with your down payment, and provide other assistance. These non-profit programs exist to promote home ownership in particular areas.

Explore no-down and low-down mortgage loans.

  • FHA mortgage loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in aiding low to moderate-income buyers qualify for mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA aids first-time homebuyers and others who might 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 mortgage are normally the going interest rate, but the down payment requirements with an FHA mortgage will be below those of conventional loans. Closing costs might be covered by the mortgage, while your down payment may be as low as 3% of the total amount.

  • VA 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 rate of interest, no down payment, and limited closing costs. Although the mortgages don't originate from the VA, the department certifies applicants by issuing eligibility certificates.

  • Piggy-back loans

    You may fund your down payment through a second mortgage that closes at the same time as the first. Most of the time, the piggyback loan takes care of 10 percent of the home's price, and the first mortgage covers 80 percent. Rather than the usual 20 percent down payment, the buyer will just have to pull together the remaining 10 percent.

  • Carry-Back loans

    In a "carry back" situation, the seller commits to loan you some of his own equity to assist you with your down payment money. The buyer finances the highest percentage of the purchase price through a traditional mortgage program and borrows the remaining funds from the seller. Typically you'll pay a slightly higher rate on the loan from the seller.

The satisfaction will be the same, no matter how you manage to come up with your down payment. Your new home will be your reward!

Need to talk about your down payment? Call us: (303) 228-2254.

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