Building Your Down Payment

Lots of borrowers qualify for various loan programs, but they can't afford a large down payment. Below are a few methods that will help you get together your down payment

Tighten your belt and save. Scrutinize your budget to discover extra money to go toward 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 ways to save additional funds include moving into less expensive housing, and skipping a year's vacation.

Work a second job and sell things you don't need. Try to find an additional job. This can be exhausting, but the temporary difficulty can help you get your down payment. You can also get serious about the possessions you actually need and the items you may be able to put up for sale. Maybe you own collectibles you can sell on an auction website, or quality household goods for a tag or garage sale. You can also look into what any investments you hold will sell for.

Tap into retirement funds. Check the parameters of your particular plan. It is possible to pull out funds from a 401(k) plan for a down payment or perform a withdrawal from an Individual Retirement Account. Be sure you comprehend the tax ramifications, your obligation for repaying funds, and any early withdrawal penalties.

Ask for help from family members. Many homebuyers are sometimes lucky enough to get down payment assistance from gracious parents and other family members who are prepared to help get them in their first home. Your family members may be inclined to help you reach the milestone of having your first home.

Contact housing finance agencies. These types of agencies provide provisional mortgate loan programs- for low and moderate-income borrowers, buyers with an interest in renovating a house within a particular area, and other groups as defined by each finance agency. Financing with this type of agency, you may be given an interest rate that is below market, down payment assistance and other advantages. These kinds of agencies can help you with a reduced rate of interest, get you your down payment, and provide other benefits. The primary goal of non-profit housing finance agencies is to promote home ownership in targeted parts of the city.

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

  • 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 aiding low to moderate-income individuals qualify for mortgage loans. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA aids first-time buyers and others who might not be eligible for a conventional loan by themselves, by offering mortgage insurance to private lenders. Interest rates with an FHA loan typically feature the going interest rate, but the down payment with an FHA loan are less than those of conventional loans. The down payment may go as low as 3 percent while the closing costs could be financed in the mortgage.

  • VA mortgages

    Guaranteed by the Department of Veterans Affairs, a VA loan qualifies veterens and service people. This particular loan does not require a down payment, has limited closing costs, and provides a competitive rate of interest. While the mortgages don't originate from the VA, the department verfifies borrowers by issuing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes with the first. Usually the piggyback loan takes care of 10 percent of the home's price, and the first mortgage covers 80 percent. The homebuyer pays the remaining 10%, instead of having to pull together the usual 20% down payment.

  • Carry-Back loans

    In a "carry back" mortgage, the seller commits to lend you some of his home equity to help you get your down payment funds. You would borrow the largest portion of the purchase price from a traditional mortgage lender and finance the remainder with the seller. Typically, this form of second mortgage has higher interest.

No matter how you gather down payment money, the thrill of reaching the goal of living in your own home will be just as great!

Want to discuss your down payment? Give us a call: 503-657-3311.