Putting Together Your Down Payment

Lots of people who are looking to buy a new home qualify for various loan programs, but they don't have a lot of money to pay a down payment. Below are a few methods that will help you put together a down payment

Cut expenses and save. Look for ways you can trim your expenses to save toward a down payment. You could also decide to enroll in an automatic savings plan to automatically have a set portion of your paycheck moved into a savings account. You would be wise to look into some big expenses in your spending history that you can do without, or trim, at least temporarily. For example, you may decide to move into less expensive housing, or skip a family vacation.

Sell things you don't need and find a second job. Look for an additional job. This can be rough, but the temporary trial can provide your down payment money. In addition, you can put together a comprehensive inventory of items you may be able to sell. Unused gold jewelry can bring a good amount from local jewelry stores. You might own collectibles you can put up for sale on an online auction, or quality household items for a tag or garage sale. You could also look into what your investments will sell for.

Borrow from your retirement plan. Investigate the provisions of your specific plan. You may take out funds from a 401(k) plan for a down payment or withdraw from an IRA. You will need to make sure you understand about any penalties, the way this could affect on income taxes, and repayment obligation.

Ask for assistance from generous family members. First-time homebuyers somtimes get help with their down payment help from caring family members who are prepared to help get them in their own home. Your family members may be willing to help you reach the goal of owning your first home.

Learn about housing finance agencies. These agencies provide provisional mortgage loans for moderate and low income borrowers, buyers with an interest in sprucing up a house within a targeted area, and additional particular types of buyers as defined by the agency. With the help of a housing finance agency, you can receive a below market interest rate, down payment assistance and other benefits. Housing finance agencies can assist you with a reduced interest rate, get you your down payment, and offer other advantages. The primary purpose of not-for-profit housing finance agencies is boosting the purchase of homes in targeted areas.

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

  • FHA loans

    The Federal Housing Administration (FHA), which is inside the U.S. Department of Housing and Urban Development (HUD), plays an important part in aiding low and moderate-income individuals get mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers who wish to qualify for mortgages. FHA assists first-time homebuyers and others who may not be able to qualify for a conventional mortgage on their own, by offering mortgage insurance to lenders. Down payment sums for FHA mortgages are smaller than those of typical mortgage loans, although these mortgages have average rates of interest. Closing costs can be included in the mortgage, while the down payment may be as low as 3 percent of the purchase price.

  • VA loans

    Guaranteed by the Department of Veterans Affairs, a VA loan is offered to service people and veterans. This special loan requires no down payment, has mimimal closing costs, and offers a competitive rate of interest. While the VA doesn't actually finance the loans, it does certify eligibility to apply for a VA mortgage.

  • Piggy-back loans

    You may finance a down payment with a second mortgage that closes with the first. Generally the first mortgage covers 80% of the cost of the home and the "piggyback" funds 10%. Rather than the traditional 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. You would finance the majority of the purchase price with a traditional lending institution and finance the remainder with the seller. Usually you'll pay a slightly higher rate on the loan financed by 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 well worth it!

Want to discuss your down payment? Give us a call: 3032282254.

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Firelight Mortgage Consultants

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7887 East Belleview Ave Ste 1100
Englewood, CO 80111