Your Down Payment

Many borrowers can qualify for several different kinds of mortgages, but they can't afford a large down payment. Here are a few straightforward methods that will help you get together a down payment

Slash the budget and build up savings. Turn your budget inside out to uncover ways you can cut expenses to save for your down payment. You also could enroll in an automatic savings plan at your bank to have a portion of your payroll automatically transferred into a savings account. You could look into some big expenses in your budget that you can live without, or reduce, at least temporarily. Here are a couple of examples: you may decide to move into less expensive housing, or skip a vacation.

Sell things you do not need and find a part-time job. Look for an additional job. This can be rough, but the temporary difficulty can help you get your down payment. You can also get serious about the possessions you really need and the items you could be able to put up for sale. Maybe you have desirable items you can sell at an auction website, or household goods for a tag or garage sale. You might also research what any investments you have may sell for.

Borrow money from a retirement plan. Explore the details for your individual plan. Many people get down payment money from withdrawing what they need from IRAs or getting funds out of 401(k) programs. Make sure you are clear about any penalties, the way this may affect on income taxes, and repayment obligation.

Request a gift from your family. Many buyers somtimes receive help with their down payment help from thoughtful parents and other family members who may be prepared to help them get into their first home. Your family members may be pleased at the chance to help you reach the milestone of owning your own home.

Learn about housing finance agencies. Special mortgate loan programs are extended to homebuyers in specific situations, like low income purchasers or homebuyers looking to remodel houses in a certain part of town, among others. Financing with a housing finance agency, you may receive a below market interest rate, down payment assistance and other incentives. Housing finance agencies may assist eligible homebuyers with a reduced interest rate, get you your down payment, and provide other assistance. The main purpose of non-profit housing finance agencies is boosting residence ownership in particular parts of the city.

Explore no-down and low-down mortgages.

  • FHA mortgage loans

    The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays a vital part in assisting low and moderate-income individuals get mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers who need to qualify for mortgages. FHA helps first-time homebuyers and others who may not be able to qualify for a traditional mortgage loan on their own, by providing mortgage insurance to private lenders. Interest rates for an FHA loan are generally the current interest rate, but the down payment with an FHA mortgage are below those of conventional loans. The required down payment can be as low as three percent while the closing costs could be included in the mortgage loan.

  • VA mortgage loans

    With a guarantee from the Department of Veterans Affairs, a VA loan assists veterens and service people. This specialized loan does not require a down payment, has limited closing costs, and provides the advantage of a competitive interest rate. While it's true that the mortgages aren't actually financed by the VA, the office certifies borrowers by providing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes along with the first. Generally the piggyback loan takes care of 10 percent of the purchase amount, while the first mortgage finances 80 percent. Rather than the traditional 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 funds. The buyer funds most of the purchase price with a traditional mortgage program and borrows the remainder from the seller. Usually this type of second mortgage has a higher rate of interest.

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

Want to discuss down payment options? Call us at (334) 285-8850.

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