Your Down Payment

Lots of people who are looking to purchase a new house can qualify for a mortgage loan, but they don't have a lot of money to pay a down payment. We have a few suggestions

Slash the budget and build up savings. Be on the look-out for ways you can trim your expenditures to set aside funds for a down payment. You could also decide to enroll in an automatic savings plan at your bank to have a percentage of your pay automatically moved into your savings account. You could look into some big expenses in your budget that you can do 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 get 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 make an exhaustive list of items you can sell. Unworn gold jewelry can bring a good price from local jewelry stores. You might own collectibles you can put up for sale on an auction website, or household goods for a garage or tag sale. Also, you can think about selling any investments you own.

Tap into retirement funds. Explore the details of your individual plan. Some homebuyers get down payment money from withdrawing funds from IRAs or taking money out of their 401(k) programs. Make sure you comprehend the tax consequences, your obligation for repayment, and any penalties for withdrawing early.

Ask for assistance from family members. First-time buyers somtimes get down payment assistance from gracious parents and other family members who may be prepared to help them get into their first home. Your family members may be pleased to help you reach the goal of buying your own home.

Learn about housing finance agencies. Provisional mortgage loans are offered to buyers in certain situations, such as low income homebuyers or buyers planning to improve homes in a specific part of town, among others. With the help of a housing finance agency, you can receive an interest rate that is below market, down payment assistance and other benefits. These kinds of agencies may help eligible homebuyers with a lower rate of interest, get you your down payment, and provide other benefits. These non-profit agencies exist to build up the value of homes in particular neighborhoods.

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

  • Federal Housing Administration (FHA) mortgages

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a significant role 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) helps individuals get FHA offers mortgage insurance to private lenders, enabling buyers who might not qualify for a conventional mortgage loan, to receive home financing. Down payment totals for FHA loans are lower than those of conventional mortgages, although these mortgages hold average interest rates. The required down payment may go as low as three percent and the closing costs could be covered by 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 reasonable interest rate, no down payment, and reduced closing costs. While it's true that the mortgage loans don't originate from the VA, the office certifies applicants by providing eligibility certificates.

  • Piggy-back loans

    You can fund your down payment with a second mortgage that closes with the first. Generally the first mortgage is for 80% of the purchase amount and the "piggyback" is for 10%. The homebuyer pays the remaining 10%, instead of needing to pull together the usual 20% down payment.

  • Carry-Back loans

    In the case of the seller "carrying back a second mortgage," the you borrow part of the seller's home equity.. In this scenario, you would borrow the majority of the purchase price from a traditional mortgage lending institution and borrow the remaining amount from the seller. Typically, this kind of second mortgage has a higher rate of interest.

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

Need to talk about your down payment? Call us: (334) 285-8850.

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