Your Down Payment

Many people who are looking to purchase a new home qualify for a mortgage loan, but they can't afford a large down payment. Below are a few methods that will help you put together your down payment

Tighten your belt and save. Turn your budget upside-down to uncover extra money to save for your down payment. There are bank programs in which a specific portion of your take-home pay is automatically placed into a savings account each pay period. Some effective approaches to build up funds include moving into a residence that is less expensive, and staying local for your family vacation for a year or two.

Sell items you do not need and get a part-time job. Perhaps you can get a second job to get your down payment money. You can also get serious about the possessions you really need and the things you can put up for sale. You might own collectibles you can put up for sale on an auction website, or household goods for a tag or garage sale. You might also research what any investments you have could sell for.

Tap into your retirement funds. Explore the specifics for your individual plan. Many people get down payment money by withdrawing funds from IRAs or borrowing from 401(k) programs. You will need to make sure you understand about any penalties, the effect this will have on your taxes, and repayment terms.

Ask for help from generous family members. Many buyers somtimes get help with their down payment assistance from gracious family members who are eager to help them get into their first home. Your family members may be eager to help you reach the goal of owning your first home.

Contact housing finance agencies. These types of agencies extend provisional loan programs to low and moderate-income buyers, buyers interested in sprucing up a house within a targeted part of the city, and other groups as specified by the finance agency. Working with this kind of agency, you probably will be given a below market interest rate, down payment assistance and other benefits. These types of agencies may assist you with a lower interest rate, get you your down payment, and offer other benefits. These non-profit agencies to build up the value of homes in certain areas.

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

  • FHA loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in assisting low to moderate-income Americans qualify for mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA helps first-time homebuyers and others who would not be able to qualify for a conventional mortgage loan by themselves, by offering mortgage insurance to lenders. Down payment totals for FHA mortgages are smaller than those with traditional mortgages, although these loans hold current interest rates. The down payment may go as low as 3 percent while the closing costs could be financed in the mortgage.

  • VA loans

    Guaranteed by the Department of Veterans Affairs, a VA loan qualifies service people and veterans. This special loan requires no down payment, has limited closing costs, and provides the advantage of a competitive rate of interest. While the mortgages don't originate from the VA, the department verfifies borrowers by issuing eligibility certificates.

  • Piggy-back loans

    You may finance your down payment through a second mortgage that closes along with the first. Usually the first mortgage covers 80% of the purchase price and the "piggyback" funds 10%. The homebuyer covers the remaining 10%, rather than needing to pull together the typical 20% down payment.

  • Carry-Back loans

    In a "carry back" situation, the seller commits to loan you a portion of his home equity to help you get your down payment funds. The buyer funds most of the purchase price through a traditional mortgage program and borrows the remaining funds from the seller. Usually you will pay a somewhat higher interest rate with the loan financed by the seller.

No matter your method of putting together down payment funds, the thrill of owning your own home will be just as great!

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

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