Your Down Payment

Many folks who would like to purchase a new house qualify for various loan programs, but they don't have a lot of cash to pay the standard down payment. Want to look into getting a new house, but don't know how you should get together your down payment?

Slash your budget and build up savings. Turn your budget inside out to find extra money to save for your down payment. Also, you can look into bank programs in which some of your paycheck is automatically deposited into savings each pay period. You could look into some big expenses in your spending history that you can give up, or trim, at least temporarily. Here are a couple of examples: you might move into less expensive housing, or skip a vacation.

Work more and sell items you don't need. Look for a second job. This can be rough, but the temporary difficulty can provide your down payment money. You can also get serious about the possessions you actually need and the items you can sell. Multiple small items could add up to a nice sum at a garage or tag sale. You can also look into what your investments could bring if sold.

Tap into your retirement funds. Explore the specifics of your individual plan. You may pull out money from a 401(k) plan for a down payment or withdraw from an Individual Retirement Account. Make sure you understand about any penalties, the effect this may have on income taxes, and repayment terms.

Ask for help from members of your family. Many homebuyers are often fortunate enough to get down payment assistance from thoughtful parents and other family members who may be willing to help get them in their first home. Your family members may be pleased at the chance to help you reach the milestone of owning your first home.

Learn about housing finance agencies. These agencies provide provisional mortgate loan programs- for moderate and low income borrowers, buyers with an interest in sprucing up a residence within a particular area, and other groups as specified by each agency. With the help of a housing finance agency, you may get a below market interest rate, down payment assistance and other advantages. These kinds of agencies may assist eligible homebuyers with a lower rate of interest, help with your down payment, and provide other advantages. The principal purpose of not-for-profit housing finance agencies is to promote the purchase of homes in certain places.

Learn 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 a vital part in assisting low and moderate-income families get mortgage loans. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids homebuyers in getting mortgages. FHA helps first-time homebuyers and others who might not be able to qualify for a conventional mortgage by themselves, by offering mortgage insurance to lenders. Down payment requirements for FHA loans are smaller than those for typical mortgages, although these mortgages come with average interest rates. Closing costs can be included in the mortgage, while your down payment may 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 particular loan does not require a down payment, has limited closing costs, and provides the benefit of a competitive rate of interest. While the VA does not provide the mortgage loans, it does issue a certificate of eligibility to apply for a VA loan.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that you close along with the first. Usually the first mortgage is for 80% of the cost of the home and the "piggyback" is for 10%. The homebuyer covers the remaining 10%, instead of putting the typical 20% down payment.

  • Carry-Back loans

    In a "carry back" situation, the seller commits to loan you some of his home equity to help you get your down payment money. In this scenario, you would borrow the majority of the purchase price from a traditional mortgage lending institution and finance the remainder with the seller. Typically you will pay a somewhat higher interest rate on the loan financed by the seller.

No matter how you gather your down payment funds, the satisfaction of reaching the goal of owning your own home will be just as great!

Want to discuss down payments? Call us at 7072522700.