Your Down Payment

Lots of people who would like to buy a new home qualify for various loan programs, but they don't have much to put up the standard down payment. We have a few ideas

Cut expenses and save. Turn your budget upside-down to uncover ways you can cut expenses to save for your down payment. You also could enroll in an automatic savings plan at your bank to have a percentage of your pay automatically transferred into a savings account. Some practical ways to build up funds include moving into a residence that is less expensive, and staying home for your vacation this year.

Work a second job and sell things you don't need. Try to get an additional job. This can be exhausting, but the temporary difficulty can provide your down payment money. Additionally, you can make a comprehensive list of things you can sell. Broken gold jewelry can be sold at local jewelers. A closetful of small items can add up to a nice sum at a garage or tag sale. Also, you might want to look into selling any investments you hold.

Borrow from a retirement plan. Explore the specifics for your individual plan. Many homebuyers get down payment money by withdrawing what they need from Individual Retirement Accounts or taking funds out of their 401(k) plans. Be sure to learn about the tax ramifications, your obligation for repaying funds, and possible penalties for withdrawing early.

Request a generous gift from family. Many buyers somtimes receive help with their down payment assistance from giving family members who may be eager 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.

Research housing finance agencies. These agencies provide special loan programs to low and moderate-income borrowers, buyers with an interest in remodeling a house within a specific area, and other groups as specified by each finance agency. Working through this kind of agency, you probably will be given an interest rate that is below market, down payment assistance and other advantages. Housing finance agencies can assist eligible buyers with a reduced rate of interest, help with your down payment, and provide other benefits. The principal goal of not-for-profit housing finance agencies is boosting the purchase of homes in certain areas.

Learn about low-down and no-down mortgages.

  • Federal Housing Administration (FHA) mortgage loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a vital part in aiding low to moderate-income buyers qualify for mortgage loans. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA offers mortgage insurance to private lenders, enabling new homebuyers who might not qualify for a conventional loan, to obtain financing. Down payment sums for FHA loans are smaller than those with traditional mortgage loans, even though these loans come with current interest rates. The required down payment can go as low as three percent and the closing costs could be financed in the mortgage.

  • VA mortgages

    VA loans are backed by the U.S. Department of Veterans Affairs. Service persons and veterans can benefit from a VA loan, which typically offers a low interest rate, no down payment, and minimal closing costs. Although the VA does not actually provide the loans, it does issue a certificate of eligibility to qualify for a VA mortgage.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes along with the first. Most of the time, the piggyback loan is for 10 percent of the home's amount, and the first mortgage finances 80 percent. The borrower covers the remaining 10%, instead of putting the typical 20% down payment.

  • Carry-Back loans

    In a "carry back" mortgage, the seller agrees to lend you some of his own equity to help you get your down payment money. The buyer funds the highest percentage of the purchase price with a traditional mortgage program and borrows the remaining funds from the seller. Generally, this type 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 new home will be well worth it!

Want to discuss the best options for down payments? Call us at 503-657-3311.