Your Down Payment

Lots of people who are looking to purchase a new house qualify for various loan programs, but they can't afford a large down payment. We have a few ideas

Slash the budget and build up savings. Turn your budget upside-down to discover ways you can cut expenses to go toward your down payment. You could also try enrolling in an automatic savings plan at your bank to have a portion of your pay automatically transferred into your savings account. You would be wise to look into some big expenses in your spending history that you can do without, or trim, at least temporarily. For example, you may move into less expensive housing, or skip a family vacation.

Sell things you do not really need and find a second job. Maybe you can find a second job and save your earnings. Additionally, you can put together a comprehensive inventory of items you may be able to sell. Unworn gold jewelry can bring a good amount from local jewelry stores. Maybe you have desirable items you can sell at an online auction, or household items for a garage or tag sale. Also, you might want to consider selling any investments you own.

Tap into retirement funds. Investigate the provisions of your specific plan. It is possible to borrow funds from a 401(k) plan for you down payment or perform a withdrawal from an IRA. Make sure to find out about the tax consequences, repayment terms, and possible early withdrawal penalties.

Ask for assistance from members of your family. First-time buyers somtimes receive down payment help from gracious parents and other family members who may be prepared to help get them in their first home. Your family members may be pleased to help you reach the goal of having your first home.

Learn about housing finance agencies. Special mortgate loan programs are extended to homebuyers in specific situations, like low income buyers or future homeowners planning to renovating homes in a targeted neighborhood, among others. With the help of a housing finance agency, you can be given a below market interest rate, down payment assistance and other advantages. These kinds of agencies may help eligible buyers with a reduced rate of interest, get you your down payment, and provide other benefits. The principal goal of not-for-profit housing finance agencies is boosting the purchase of homes in particular parts of the city.

Research no-down and low-down mortgage loans.

  • Federal Housing Administration (FHA) mortgages

    The Federal Housing Administration (FHA), which is inside the U.S. Department of Housing and Urban Development (HUD), plays a vital part in helping low to moderate-income families qualify for mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals who wish to qualify for mortgages. FHA offers mortgage insurance to private lenders, ensuring the buyers are eligible for a loan. Down payment amounts for FHA mortgages are lower than those for conventional mortgages, although these loans come with average rates of interest. The down payment may be as low as three percent and the closing costs may be financed in the mortgage.

  • VA mortgages

    Guaranteed by the Department of Veterans Affairs, a VA loan assists veterens and service people. This specialized loan requires no down payment, has limited closing costs, and offers a competitive rate of interest. Even though the VA doesn't provide the loans, it does certify eligibility to qualify for a VA loan.

  • Piggy-back loans

    You can finance a down payment through a second mortgage that closes at the same time as the first. Most of the time, the piggyback loan takes care of 10 percent of the home's price, while the first mortgage finances 80 percent. In contrast to 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" agreement, the seller agrees to lend you a piece of his own equity to help you with your down payment money. The buyer finances most of the purchase price with a traditional mortgage program and borrows the remainder from the seller. Usually you'll pay a slightly higher rate on the loan from the seller.

No matter your method of putting together your down payment, the thrill of owning your own home will be just as great!

Need to talk about down payment options? Call us: 405-513-7700.

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