Putting Together Your Down Payment

Many buyers qualify for several different kinds of mortgages, but they can't afford a large down payment. Below are a few ways to get together your down payment

Cut expenses and save. Look for ways you can trim your monthly expenditures to save toward a down payment. You might also decide to enroll in an automatic savings plan at your bank to automatically have a set amount from your paycheck transferred into savings. Some practical strategies to build up funds include moving into less expensive housing, and skipping a year's vacation.

Sell things you don't really need and find a part-time job. Try to find an additional job. This can be exhausting, but the temporary difficulty can help you get your down payment. In addition, you can make an exhaustive list of things you can sell. Unworn gold jewelry can bring a good amount from local jewelry stores. Maybe you own collectibles you can sell on an online auction, or household items for a tag or garage sale. Also, you might want to look into selling any investments you own.

Tap into retirement funds. Check the provisions of your particular program. Many people get down payment money by withdrawing from Individual Retirement Accounts or borrowing from 401(k) programs. Make sure to learn about the tax consequences, repayment terms, and any early withdrawal penalties.

Request a gift from family. First-time homebuyers are often fortunate enough to receive help with their down payment assistance from thoughtful parents and other family members who are eager to help them get into their first home. Your family members may be happy at the chance to help you reach the milestone of buying your own home.

Contact housing finance agencies. These types of agencies extend provisional mortgate loan programs to moderate and low income homebuyers, buyers interested in sprucing up a house in a particular area, and additional groups as specified by the finance agency. Financing through a housing finance agency, you can receive a below market interest rate, down payment help and other advantages. Housing finance agencies can help eligible homebuyers with a lower rate of interest, help with your down payment, and provide other assistance. The main purpose of non-profit housing finance agencies is boosting the purchase of homes in specific areas.

Find out about low-down and no-down mortgages.

  • Federal Housing Administration (FHA) mortgages

    The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in helping low to moderate-income buyers get mortgage loans. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals who wish to qualify for home financing. FHA assists first-time homebuyers and others who might not be able to qualify for a typical mortgage loan by themselves, by offering mortgage insurance to lenders. Down payment requirements for FHA mortgages are below those for traditional mortgage loans, even though these mortgages have current interest rates. Closing costs may be included in the mortgage, and the down payment can be as low as 3% of the total.

  • VA mortgage loans

    With a guarantee from the Department of Veterans Affairs, a VA loan qualifies veterens and service people. This special loan requires no down payment, has mimimal closing costs, and provides a competitive interest rate. Even though the mortgage loans don't originate from the VA, the department certifies applicants by issuing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that you close with the first. In most cases the first mortgage covers 80% of the cost of the home and the "piggyback" funds 10%. In contrast to the usual 20 percent down payment, the homebuyer just has to cover the remaining 10 percent.

  • Carry-Back loans

    With a carry-back mortgage, the seller loans you part of his or her home equity. The buyer funds most of the purchase price with a traditional mortgage program and finances the remaining funds with the seller. Typically you'll pay a slightly higher rate with the loan from the seller.

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

Want to discuss down payment options? Give us a call: 561-395-4264.