Building Your Down Payment

Lots of people who would like to buy a new house qualify for various loan programs, but they don't have much to pay the standard down payment. Get started here

Tighten your belt and save. Turn your budget upside-down to find ways you can cut expenses to go toward your down payment. You also might enroll in an automatic savings plan to have a percentage of your payroll automatically transferred into savings. You might 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 move into less expensive housing, or skip a family vacation.

Sell things you don't need and get a part-time job. Perhaps you can get an additional job and build up your earnings. In addition, you can put together an exhaustive list of things you can sell. Unworn gold jewelry can be sold at local jewelry stores. You may have collectibles you can sell on an online auction, or quality household items for a tag or garage sale. You could also look into what your investments may sell for.

Tap into retirement funds. Explore the specifics for your particular plan. You may borrow funds from a 401(k) plan for you down payment or withdraw from an Individual Retirement Account. You will need to ensure you are knowledgable about any penalties, the way this could affect on your taxes, and repayment terms.

Ask for assistance from family members. Many buyers are often lucky enough to get down payment help from caring parents and other family members who may be willing to help get them in their own home. Your family members may be pleased to help you reach the goal of having your own home.

Learn about housing finance agencies. These agencies provide provisional mortgage programs for low and moderate-income homebuyers, buyers with an interest in renovating a home in a specific part of the city, and additional particular kinds of buyers as specified by the agency. With the help of a housing finance agency, you probably will be given an interest rate that is below market, down payment assistance and other incentives. Housing finance agencies can assist you with a lower rate of interest, help with your down payment, and offer other advantages. The main goal of not-for-profit housing finance agencies is boosting home ownership in targeted parts of the city.

Explore no-down and low-down mortgages.

  • FHA mortgage loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in helping low and moderate-income Americans get mortgage loans. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals in getting mortgages. FHA aids first-time buyers and others who might not be eligible for a conventional mortgage on their own, by offering mortgage insurance to private lenders. Down payment totals for FHA loans are smaller than those of conventional mortgage loans, even though these loans come with average interest rates. Closing costs may be financed in the mortgage, and the down payment can be as low as 3% of the total amount.

  • VA mortgages

    Guaranteed by the Department of Veterans Affairs, a VA loan qualifies service people and veterans. This specialized loan does not require a down payment, has limited closing costs, and provides the advantage of a competitive interest rate. Although the mortgage loans aren't actually financed by the VA, the office certifies borrowers by issuing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes with the first. In most cases the first mortgage is for 80% of the cost of the home and the "piggyback" is for 10%. The borrower covers the remaining 10%, rather than come up with the usual 20% down payment.

  • Carry-Back loans

    In a "carry back" mortgage, the seller agrees to loan you some of his home equity to help you with your down payment money. In this scenario, you would finance the largest portion of the purchase price with a traditional lending institution and finance the remaining amount with the seller. Usually this form of second mortgage has higher interest.

The satisfaction will be the same, no matter how you manage to come up with your down payment. Your brand new home will be your reward!

Need to talk about your down payment? Give us a call: 405-513-7700.

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