Your Down Payment

Many people who are looking to buy a new home can qualify for several different kinds of mortgages, but they can't afford a large down payment. We have a few ideas

Tighten your belt and save. Look for ways you can trim your monthly expenditures to put away money for a down payment. There are bank programs in which some of your take-home pay is automatically placed into a savings account each pay period. Some effective methods to put together funds include moving into housing that is less expensive, and staying local for your vacation for a year or two.

Work more and sell items you do not need. Look for a second job. This can be exhausting, but the temporary trial can help you get your down payment. In addition, you can put together an exhaustive list of things you can sell. Broken gold jewelry can bring a good price from local jewelers. A closetful of small things may add up to a fair amount at a garage or tag sale. Also, you might want to think about selling any investments you own.

Borrow money from a retirement plan. Investigate the provisions of your retirement program. It is possible to pull out money from a 401(k) plan for you down payment or withdraw from an Individual Retirement Account. Make sure you understand about any penalties, the way this may affect on your income taxes, and repayment terms.

Ask for help from family members. Many homebuyers somtimes receive help with their down payment help from giving parents and other family members who are willing to help get them in their first home. Your family members may be happy at the chance to help you reach the goal of having your first home.

Learn about housing finance agencies. These agencies offer special mortgage programs to low and moderate-income homebuyers, buyers interested in remodeling a residence within a targeted part of the city, and other groups as defined by each finance agency. With the help of a housing finance agency, you may get an interest rate that is below market, down payment assistance and other perks. Housing finance agencies may help eligible buyers with a lower interest rate, help with your down payment, and provide other assistance. The main purpose of non-profit housing finance agencies is boosting the purchase of homes in targeted parts of the city.

Find out about low-down and no-down mortgage loan programs.

  • Federal Housing Administration (FHA) mortgage loans

    The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in helping low to moderate-income individuals get mortgages. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA offers mortgage insurance to the private lenders, enabling buyers who may not qualify for a typical mortgage loan, to get home financing. Down payment totals for FHA loans are lower than those with typical mortgage loans, although these loans come with current rates of interest. The required down payment may be as low as 3 percent while the closing costs may be covered by the mortgage.

  • VA loans

    Guaranteed by the Department of Veterans Affairs, a VA loan is offered to veterens and service people. This specialized loan requires no down payment, has mimimal closing costs, and offers a competitive interest rate. While the VA does not finance the mortgages, it does certify eligibility to apply for a VA loan.

  • Piggy-back loans

    You can finance your down payment with a second mortgage that closes at the same time as the first. Often the first mortgage covers 80% of the purchase price and the "piggyback" is for 10%. Instead of the traditional 20 percent down payment, the homebuyer just has to pull together the remaining 10 percent.

  • Carry-Back loans

    In a "carry back" agreement, the seller commits to lend you a portion of his home equity to assist you with your down payment funds. You would finance the majority of the purchase price with a traditional mortgage lender and finance the remainder with the seller. Usually you'll pay a slightly higher interest rate on the loan financed by the seller.

The satisfaction will be the same, no matter which strategy you use to put together the down payment. Your brand new home will be your reward!

Need to talk about down payments? Call us at 305-967-7200.