Your Down Payment

Lots of borrowers can easily qualify for a loan, but they don't have a lot of money to pay the standard down payment. Below are a few methods that will help you put together a down payment

Slash your budget and build up savings. Look for ways you can reduce your expenditures to put away money for a down payment. You may also decide to enroll in an automatic savings plan at your bank to have a portion of your pay automatically moved into a savings account. You would be wise to look into some big expenses in your spending history that you can live without, or trim, at least temporarily. Here are a couple of examples: you may move into less expensive housing, or skip a family vacation.

Work more and sell things you do not need. Perhaps you can find a second job and build up your earnings. You can also get creative about the things you can put up for sale. Maybe you have collectibles you can sell at an online auction, or quality household goods for a garage or tag sale. You could also explore what any investments you own may sell for.

Borrow from your retirement plan. Investigate the provisions of your particular program. Many people get down payment money from withdrawing funds from their Individual Retirement Accounts or borrowing from 401(k) plans. Be sure you know about any penalties, the way this may affect on your taxes, and repayment terms.

Ask for a gift from your family. First-time buyers somtimes receive help with their down payment assistance from caring family members who are anxious to help them get into their first home. Your family members may be pleased at the chance to help you reach the milestone of owning your own home.

Contact housing finance agencies. These agencies offer special mortgage programs to moderate and low income homebuyers, buyers with an interest in rehabilitating a house within a particular part of the city, and additional particular kinds of buyers as specified by the finance agency. With the help of a housing finance agency, you probably will get a below market interest rate, down payment help and other benefits. These kinds of agencies can help eligible homebuyers with a reduced rate of interest, get you your down payment, and provide other benefits. These non-profit programs exist to boost home ownership in certain neighborhoods.

Learn about low-down and no-down mortgages.

  • FHA mortgage loans

    The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays a vital role in helping low and moderate-income individuals get mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA provides mortgage insurance to the private lenders, enabling buyers who will not qualify for a typical mortgage loan, to get a mortgage. Interest rates for an FHA loan typically feature the going interest rate, but the down payment for an FHA loan will be lower than those of conventional loans. Closing costs may be covered by the mortgage, while your down payment might be as low as 3 percent of the total.

  • VA mortgage loans

    VA loans are backed by the U.S. Department of Veterans Affairs. Veterens and service people can get a VA loan, which generally offers a reasonable fixed rate of interest, no down payment, and minimal closing costs. While the mortgage loans are not actually financed by the VA, the department verfifies borrowers by issuing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that you close at the same time as the first. Usually the first mortgage is for 80% of the cost of the home and the "piggyback" is for 10%. Rather than the usual 20 percent down payment, the homebuyer just has to pull together the remaining 10 percent.

  • Carry-Back loans

    In a "carry back" situation, the seller commits to loan you a portion of his own equity to help you with your down payment funds. The buyer funds most of the purchase price through a traditional mortgage program and borrows the remainder from the seller. Generally, this kind of second mortgage will have higher interest.

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

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

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