Your Down Payment

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Lots of buyers can easily qualify for a loan, but they can't afford a large down payment. Want to look into getting a new home, but don't know how you should put together a down payment?:

Reduce expenses and save. Look for ways you can trim your monthly expenditures to set aside funds for a down payment. You might also decide to enroll in an automatic savings plan at your bank to automatically have a predetermined amount from your take-home pay moved into your savings account. You could look into some big expenses in your budget that you can give up, or reduce, at least temporarily. For example, you may move into less expensive housing, or skip a family vacation.

Sell things you do not really need and find a part-time job. Try to find an additional job. This can be exhausting, but the temporary trial can help you get your down payment. In addition, you can put together an exhaustive list of things you can sell. Unused gold jewelry can be sold at local jewelers. A closetful of small items can add up to a fair amount at a garage or tag sale. You can also explore what your investments could bring if sold.

Borrow your down payment from your retirement plan. Research the specifics of your particular plan. You may borrow funds from a 401(k) plan for you down payment or withdraw from an Individual Retirement Account. Be sure you know about any penalties, the effect this will have on your income taxes, and repayment obligation.

Ask for help from members of your family. First-time buyers are often lucky enough to receive help with their down payment assistance from giving family members who may be willing to help them get into their own home. Your family members may be pleased at the chance to help you reach the goal of buying your own home.

Research housing finance agencies. Special mortgage loans are given to homebuyers in certain situations, such as low income purchasers or future homeowners planning to renovating homes in a specific part of town, among others. Financing through this kind of agency, you probably will be given a below market interest rate, down payment help and other advantages. Housing finance agencies may assist eligible homebuyers with a reduced interest rate, get you your down payment, and provide other benefits. The primary mission of non-profit housing finance agencies is to boost the purchase of homes in specific areas.

Find out about low-down and no-down mortgage loans.

  • FHA mortgages

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a significant part in helping low to moderate-income buyers qualify for mortgages. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals who wish to get home financing. FHA assists first-time homebuyers and others who may not be eligible for a conventional mortgage loan on their own, by offering mortgage insurance to the private lenders. Interest rates with an FHA mortgage normally feature the market interest rate, but the down payment with an FHA loan are below those of conventional loans. The required down payment may go as low as 3 percent while the closing costs may be financed in the mortgage loan.

  • VA mortgages

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

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes along with the first. Often the first mortgage covers 80% of the cost of the home and the "piggyback" funds 10%. In contrast to the traditional 20 percent down payment, the homebuyer will just have to pull together the remaining 10 percent.

  • Carry-Back loans

    In a "carry back" agreement, the seller agrees to loan you a portion of his home equity to help you with your down payment money. In this scenario, you would finance the majority of the purchase price with a traditional mortgage lending institution and finance the remaining amount with the seller. Usually you will pay a somewhat higher rate with the loan financed by the seller.

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

Want to discuss your down payment? Call us: (405) 555-5972.