Your Down Payment

Many people who are looking to purchase a new house can qualify for several different kinds of mortgages, but they don't have a lot of money to pay the standard down payment. Want to buy a new home, but aren't sure how you should get together your down payment?

Slash the budget and build up savings. Turn your budget upside-down to uncover ways you can cut expenses to save for your down payment. Also, you can look into bank programs in which some of your take-home pay is automatically placed into a savings account each pay period. Some practical strategies to build up funds include moving into less expensive housing, and staying local for your vacation for a year or two.

Sell items you don't really need and find a part-time job. Look for a second job. This can be exhausting, but the temporary trial can provide your down payment money. Additionally, you can put together an exhaustive list of things you may be able to sell. Unused gold jewelry can be sold at local jewelers. Multiple small items might add up to a nice sum at a garage or tag sale. Also, you might want to consider selling any investments you own.

Borrow from retirement funds. Explore the specifics of your individual plan. Some people get down payment money by withdrawing funds from their Individual Retirement Accounts or taking funds out of 401(k) plans. Be sure to ask your plan representative about the tax ramifications, your obligation for repaying the money, and any early withdrawal penalties.

Ask for assistance from generous family members. First-time buyers somtimes receive down payment assistance from giving family members who are anxious to help them get into their first home. Your family members may be eager to help you reach the milestone of owning your first home.

Research housing finance agencies. Special loan programs are provided to homebuyers in certain circumstances, like low income homebuyers or homebuyers looking to improve homes in a particular place, among others. With the help of a housing finance agency, you probably will get an interest rate that is below market, down payment help and other advantages. Housing finance agencies can assist you with a lower interest rate, get you your down payment, and provide other advantages. The principal mission of not-for-profit housing finance agencies is build up the purchase of homes in specific parts of the city.

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

  • FHA loans

    The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in assisting low and moderate-income individuals qualify for mortgages. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA offers mortgage insurance to private lenders, ensuring the buyers are eligible for a loan. Interest rates with an FHA loan typically feature the market interest rate, while the down payment amounts with an FHA loan are below those of conventional loans. The down payment may be as low as three percent and the closing costs can be packaged in the mortgage loan.

  • VA mortgage loans

    With a guarantee from the Department of Veterans Affairs, a VA loan assists veterens and service people. This particular loan requires no down payment, has mimimal closing costs, and provides the benefit of a competitive rate of interest. Even though the mortgage loans are not actually financed by the VA, the department certifies applicants by providing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that you close at the same time as the first. Most of the time, the piggyback loan takes care of 10 percent of the purchase amount, and the first mortgage finances 80 percent. Rather than the traditional 20 percent down payment, the homebuyer will just have to pull together the remaining 10 percent.

  • Carry-Back loans

    In a "carry back" mortgage, the seller commits to lend you a portion of his home equity to help you get your down payment money. In this scenario, you would borrow the largest portion of the purchase price from a traditional lending institution and borrow the remaining amount from 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 pull together the down payment. Your brand new home will be your reward!

Need to talk about down payments? Call us at 405-513-7700.

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