Your Down Payment

Many buyers qualify for several different kinds of mortgages, but they don't have much to put up a down payment. Get started here

Reduce expenses and save. Look for ways you can trim your monthly expenditures to set aside money for a down payment. Also, you can look into bank programs in which some of your take-home pay is automatically transferred into savings each pay period. Some effective approaches to build up funds include moving into housing that is less expensive, and skipping your vacation for a year or two.

Work a second job and sell items you do not need. Try to find a second job. This can be rough, but the temporary trial can provide your down payment money. In addition, you can make an exhaustive list of items you can sell. Unworn gold jewelry can be sold at local jewelers. A closetful of small items may add up to a nice sum at a garage or tag sale. Also, you can consider selling any investments you own.

Borrow funds from a retirement plan. Check the provisions of your particular plan. It is possible to take out money from a 401(k) for a down payment or withdraw from an IRA. You will want to ensure you are clear about any penalties, the way this could affect on taxes, and repayment terms.

Request a gift from family. Many buyers are sometimes fortunate enough to get down payment assistance from giving family members who are anxious to help them get into their own home. Your family members may be happy at the chance to help you reach the milestone of owning your first home.

Contact housing finance agencies. Special loan programs are extended to homebuyers in specific situations, like low income buyers or people looking to improve houses in a certain place, among others. With the help of this kind of agency, you probably will be given an interest rate that is below market, down payment assistance and other advantages. Housing finance agencies may assist eligible homebuyers with a lower interest rate, help with your down payment, and offer other advantages. The primary mission of not-for-profit housing finance agencies is promoting home ownership in targeted places.

Research no-down and low-down mortgage loans.

  • FHA loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a critical role in assisting low and moderate-income buyers get mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers in getting mortgages. FHA offers mortgage insurance to private lenders, ensuring the buyers are eligible for financing. Interest rates with an FHA mortgage usually feature the current interest rate, while the down payment requirements for an FHA loan are below those of conventional loans. Closing costs can be financed in the mortgage, and your down payment may be as low as 3% of the total amount.

  • VA mortgages

    VA loans are backed by the Department of Veterans Affairs. Veterens and service people can receive a VA loan, which typically offers a competitive rate of interest, no down payment, and reduced closing costs. Even though the VA doesn't issue the mortgage loans, it does issue a certificate of eligibility to apply for a VA mortgage.

  • Piggy-back loans

    You may fund your down payment using a second mortgage that closes with the first. Generally the piggyback loan takes care of 10 percent of the purchase price, while the first mortgage covers 80 percent. In contrast to the usual 20 percent down payment, the buyer just has to cover the remaining 10 percent.

  • Carry-Back loans

    In a "carry back" agreement, the seller agrees 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 finances the remaining funds with the seller. Typically you'll pay a slightly higher interest rate on the loan financed by the seller.

The feeling of accomplishment will be the same, no matter how you manage to put together the down payment. Your new home will be worth it!

Want to discuss your down payment? Give us a call at (512) 422-9036.

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