Building Your Down Payment

Lots of buyers qualify for various loan programs, but they don't have a lot of money to pay a down payment. Below are a few straightforward methods that will help you put together your down payment

Slash your budget and build up savings. Look for ways you can trim your monthly expenses to set aside funds for a down payment. You also might enroll in an automatic savings plan to have a percentage of your payroll automatically moved into a savings account. Some effective approaches to put together funds include moving into less expensive housing, and skipping your family vacation for a year or two.

Sell items you do not really need and get a part-time job. Look for an additional job. This can be exhausting, but the temporary difficulty can provide your down payment money. Additionally, you can make an exhaustive list of things you can sell. Unused gold jewelry can be sold at local jewelers. You may have desirable items you can put up for sale on an auction website, or quality household goods for a garage or tag sale. You could also look into what any investments you own will bring if sold.

Borrow from your retirement funds. Investigate the parameters of your specific program. You may pull out money from a 401(k) for a down payment or get a withdrawal from an Individual Retirement Account. Be sure you comprehend the tax consequences, repayment terms, and possible early withdrawal penalties.

Ask for help from members of your family. First-time homebuyers somtimes get down payment assistance from thoughtful parents and other family members who may be able 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 offer special mortgage loans for moderate and low income buyers, buyers with an interest in remodeling a house in a specific part of the city, and additional specific types of buyers as specified by each finance agency. Working through a housing finance agency, you probably will be given a below market interest rate, down payment assistance and other advantages. Housing finance agencies can help you with a reduced interest rate, get you your down payment, and provide other assistance. These non-profit programs were established to build up the value of homes in particular neighborhoods.

Find out about low-down and no-down mortgage loans.

  • Federal Housing Administration (FHA) loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a vital part in helping low and moderate-income buyers get mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers in getting home financing. FHA provides mortgage insurance to private lenders, ensuring the buyers are eligible for a mortgage loan. Interest rates for an FHA mortgage are generally the going interest rate, while the down payment for an FHA mortgage are less than those of conventional loans. The required down payment can go as low as 3 percent while the closing costs could be financed in the mortgage.

  • VA mortgages

    VA loans are backed by the Department of Veterans Affairs. Service persons and veterans qualify for a VA loan, which generally offers a competitive interest rate, no down payment, and minimal closing costs. While the mortgage loans don't originate from the VA, the office certifies applicants by issuing eligibility certificates.

  • Piggy-back loans

    You may finance your down payment with a second mortgage that closes along with the first. Generally the piggyback loan takes care of 10 percent of the purchase amount, and the first mortgage covers 80 percent. The borrower covers the remaining 10%, rather than putting the usual 20% down payment.

  • Carry-Back loans

    We a seller carries back a second mortgage, the seller loans you part of his or her home equity. The buyer funds the highest percentage of the purchase price with a traditional mortgage program and finances the remaining funds with the seller. Typically you will pay a somewhat higher rate on the loan from the seller.

No matter your method of putting together your down payment funds, the satisfaction of living in your own home will be just as sweet!

Need to talk about the best options for down payments? Give us a call: 503-657-3311.