Your Down Payment

Lots of borrowers can easily qualify for various loan programs, but they can't afford a large down payment. Get started here

Slash the budget and build up savings. Be on the look-out for ways to reduce your monthly expenses to put away money for a down payment. There are bank programs through which a specific portion of your paycheck is automatically deposited into a savings account every pay period. Some practical ways to build up funds include moving into less expensive housing, and skipping a year's vacation.

Sell things you don't really need and get a part-time job. Try to find an additional job. This can be rough, but the temporary difficulty can help you get your down payment. In addition, you can put together an exhaustive inventory of items you can sell. Unworn gold jewelry can be sold at local jewelry stores. A closetful of small items might add up to a nice sum at a garage or tag sale. Also, you might want to think about selling any investments you hold.

Borrow from your retirement plan. Check the parameters of your retirement program. Many people get down payment money from withdrawing what they need from their Individual Retirement Accounts or borrowing from their 401(k) programs. Be sure to ask your plan representative about the tax ramifications, your obligation for repaying the money, and early withdrawal penalties.

Ask for help from generous family members. First-time buyers are sometimes lucky enough to receive help with their down payment assistance from giving parents and other family members who are prepared to help them get into their own home. Your family members may be inclined to help you reach the goal of owning your first home.

Research housing finance agencies. These agencies offer special mortgate loan programs- for moderate and low income homebuyers, buyers interested in remodeling a house in a specific area, and other specific types of buyers as defined by each agency. With the help of this type of agency, you may get an interest rate that is below market, down payment assistance and other perks. Housing finance agencies can help you with a lower rate of interest, get you your down payment, and offer other benefits. These non-profit agencies were established to build up community in certain places.

Find out about low-down and no-down mortgages.

  • Federal Housing Administration (FHA) mortgages

    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 to moderate-income buyers get mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers who need to qualify for mortgage loans. FHA assists first-time buyers and others who might not be eligible for a conventional mortgage loan by themselves, by providing mortgage insurance to private lenders. Interest rates with an FHA loan usually feature the market interest rate, but the down payment for an FHA loan are below those of conventional loans. The required down payment may be as low as 3 percent while the closing costs could be included in the mortgage.

  • VA mortgages

    With a guarantee from the Department of Veterans Affairs, a VA loan qualifies veterens and service people. This specialized loan requires no down payment, has limited closing costs, and provides the benefit of a competitive rate of interest. Even though the mortgage loans 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 you close with the first. Most of the time, the first mortgage covers 80% of the cost of the home and the "piggyback" is for 10%. The homebuyer covers the remaining 10%, instead of come up with the usual 20% down payment.

  • Carry-Back loans

    In the case of the seller "carrying back a second mortgage," the seller loans you part of his or her equity. You would borrow the largest portion of the purchase price from a traditional mortgage lending institution and finance the remainder with the seller. Usually this type of second mortgage has higher interest.

The satisfaction will be the same, no matter how you manage to come up with the down payment. Your new home will be worth it!

Need to talk about down payment options? Call us: 503-657-3311.