Your Down Payment

Lots of buyers qualify for a loan, but they don't have a lot of cash to pay the standard down payment. Here are a few ideas:

Tighten your belt and save. Turn your budget upside-down to discover extra money to go toward your down payment. You could also try enrolling in an automatic savings plan at your bank to automatically have a set portion of your paycheck transferred into your savings account. Some effective strategies to put together funds include moving into less expensive housing, and skipping your family vacation for a year or two.

Work a second job and sell things you do not need. Maybe you can find a second job and build up your earnings. You can also get creative about the items you migh be able to sell. Maybe you have desirable items you can sell at an auction website, or household items for a garage or tag sale. Also, you might want to think about selling any investments you hold.

Borrow your down payment from a retirement plan. Investigate the parameters of your retirement program. Some homebuyers get down payment money from withdrawing what they need from their Individual Retirement Accounts or borrowing from 401(k) plans. Make sure you are knowledgable about any penalties, the effect this may have on taxes, and repayment terms.

Ask for a generous gift from family. Many buyers are often fortunate enough to get help with their down payment assistance from giving parents and other family members who may be willing to help get them in their own home. Your family members may be pleased to help you reach the goal of buying your first home.

Learn about housing finance agencies. Special mortgate loan programs are offered to buyers in certain circumstances, like low income homebuyers or buyers looking to renovating houses in a targeted area, among others. Working with a housing finance agency, you can be given a below market interest rate, down payment assistance and other perks. Housing finance agencies can help you with a reduced interest rate, get you your down payment, and offer other benefits. The main goal of not-for-profit housing finance agencies is boosting home ownership in specific parts of the city.

Explore no-down and low-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 an important part in helping low and moderate-income buyers qualify for mortgages. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals in qualifying for mortgages. FHA provides mortgage insurance to private lenders, making the buyers eligible for a mortgage. Down payment sums for FHA loans are below those with conventional mortgage loans, although these mortgages hold average rates of interest. The down payment may be as low as 3 percent while the closing costs may be financed in the mortgage loan.

  • 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 a competitive interest rate. While the mortgage loans don't originate from the VA, the office certifies applicants by issuing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that you close with the first. Usually the piggyback loan takes care of 10 percent of the purchase price, while the first mortgage covers 80 percent. Rather than the usual 20 percent down payment, the buyer just has to pull together the remaining 10 percent.

  • Carry-Back loans

    With a carry-back mortgage, the seller loans you part of his or her equity. The buyer finances most of the purchase price with a traditional mortgage program and borrows the remainder from the seller. Usually this kind of second mortgage has a higher rate of interest.

No matter how you gather your down payment money, the thrill of owning your own home will be just as sweet!

Want to discuss down payment options? Call us at 719-357-6601.

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