Building Your Down Payment

Many borrowers can easily qualify for a mortgage loan, but they don't have much to pay the standard down payment. Start here

Reduce expenses and save. Be on the look-out for ways you can reduce your expenses to save toward a down payment. Also, you can look into bank programs through which a specific portion of your take-home pay is automatically placed into savings each pay period. Some effective ways to put together funds include moving into a residence that is less expensive, and staying home for your family vacation for a year or two.

Sell things you don't need and get a part-time job. Try to get a second job. This can be rough, but the temporary trial can provide your down payment money. Additionally, you can make a comprehensive inventory of items you can sell. Broken gold jewelry can be sold at local jewelry stores. Multiple small items could add up to a nice sum at a garage or tag sale. You could also explore what any investments you have may sell for.

Borrow from your retirement funds. Check the provisions of your specific program. Many homebuyers get down payment money from withdrawing what they need from their Individual Retirement Accounts or borrowing from their 401(k) plans. Make sure you are knowledgable about any penalties, the effect this may have on your taxes, and repayment obligation.

Ask for help from family members. First-time buyers are often fortunate enough to receive down payment help from caring parents and other family members who may be prepared to help them get into their first home. Your family members may be inclined to help you reach the goal of owning your first home.

Contact housing finance agencies. Special mortgage loans are given to homebuyers in certain situations, such as low income purchasers or buyers looking to renovating houses in a targeted area, among others. Working with a housing finance agency, you may receive an interest rate that is below market, down payment assistance and other benefits. Housing finance agencies may assist you with a reduced interest rate, get you your down payment, and provide other benefits. These non-profit programs were formed to promote home ownership in certain places.

Explore no-down and low-down mortgages.

  • Federal Housing Administration (FHA) loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a vital role in helping low and moderate-income families get mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals who wish to qualify for home financing. FHA provides mortgage insurance to private lenders, enabling buyers who might not be eligible for a conventional loan, to get a mortgage. Down payment requirements for FHA loans are smaller than those of traditional mortgages, although these loans have current interest rates. The required down payment may go as low as three percent and the closing costs might be financed in the mortgage.

  • VA loans

    VA loans are backed by the Department of Veterans Affairs. Veterens and service people qualify for a VA loan, which typically offers a reasonable fixed interest rate, no down payment, and limited closing costs. Although the mortgage loans don't originate from the VA, the department verfifies applicants by providing eligibility certificates.

  • Piggy-back loans

    You can finance your down payment with a second mortgage that closes with the first. Most of the time, the first mortgage covers 80% of the cost of the home and the "piggyback" is for 10%. In contrast to the usual 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 lend you a portion of his own equity to help you with your down payment funds. You would borrow the majority of the purchase price from a traditional mortgage lending institution and finance the remainder with the seller. Often, this kind of second mortgage will have higher interest.

No matter how you gather down payment funds, the satisfaction of owning your own home will be just as sweet!

Need to talk about down payment options? Give us a call: 561-395-4264.


Alternative Mortgage Group

80 SW 14 Ave
Boca Raton, FL 33486