Your Down Payment

Many folks who would like to purchase a new house can qualify for several different kinds of mortgages, but they don't have a lot of cash to put up the standard down payment. Want to look into getting a new home, but aren't sure how you should get together your down payment?

Reduce expenses and save. Turn your budget upside-down to uncover extra money to save for your down payment. There are bank programs through which a specific portion of your take-home pay is automatically transferred into savings every pay period. You might look into some big expenses in your spending history that you can do without, or trim, at least temporarily. For example, you may decide to move into less expensive housing, or stay local for your vacation.

Sell things you do not need and get a second job. Look for a second job. This can be exhausting, but the temporary trial can provide your down payment money. Additionally, you can put together an exhaustive inventory of things you may be able to sell. Broken gold jewelry can bring a good amount from local jewelry stores. Multiple small items might add up to a fair amount at a garage or tag sale. Also, you can consider selling any investments you own.

Borrow from your retirement funds. Investigate the parameters of your specific program. Some homebuyers get down payment money from withdrawing funds from IRAs or borrowing from their 401(k) programs. Be sure to ask your plan representative about the tax consequences, repayment terms, and penalties for withdrawing early.

Request a generous gift from family. First-time homebuyers are often lucky enough to receive down payment assistance from gracious family members who are anxious to help get them in their own home. Your family members may be eager to help you reach the milestone of having your first home.

Contact housing finance agencies. Provisional mortgate loan programs are provided to homebuyers in specific circumstances, like low income homebuyers or buyers planning to remodel homes in a certain part of town, among others. With the help of this type of agency, you may get an interest rate that is below market, down payment help and other perks. These kinds of agencies can help eligible homebuyers with a lower rate of interest, get you your down payment, and provide other assistance. The primary purpose of non-profit housing finance agencies is boosting home ownership in particular places.

Learn about low-down and no-down mortgages.

  • Federal Housing Administration (FHA) loans

    The Federal Housing Administration (FHA), which is inside the U.S. Department of Housing and Urban Development (HUD), plays an important role in helping low to moderate-income Americans qualify for mortgages. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA provides mortgage insurance to the private lenders, making the buyers eligible for a loan. Interest rates with an FHA loan are generally the current interest rate, while the down payment requirements for an FHA loan will be lower than those of conventional loans. Closing costs can be financed within the mortgage, while your down payment can be as low as 3% of the purchase price.

  • VA loans

    VA loans are guaranteed by the U.S. Department of Veterans Affairs. Veterens and service people can receive a VA loan, which usually offers a reasonable fixed rate of interest, no down payment, and reduced closing costs. While the mortgages don't originate from the VA, the department verfifies applicants by issuing eligibility certificates.

  • Piggy-back loans

    You can fund a down payment using a second mortgage that closes at the same time as the first. Most of the time, the piggyback loan is for 10 percent of the home's price, and the first mortgage covers 80 percent. Rather than the usual 20 percent down payment, the buyer will just have to pull together the remaining 10 percent.

  • Carry-Back loans

    We a seller carries back a second mortgage, the you borrow part of the seller's home equity.. In this scenario, you would finance the majority of the purchase price with a traditional mortgage lending institution and finance the remaining amount with the seller. Typically, this type of second mortgage will have higher interest.

No matter your strategy of getting together down payment money, the thrill of living in your own home will be just as sweet!

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

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