Your Down Payment

Many borrowers qualify for various loan programs, but they don't have a lot of money to pay the standard down payment. Get started here

Slash the budget and build up savings. Scrutinize the budget to discover extra money to go toward your down payment. Also, you can look into bank programs in which a portion of your paycheck is automatically placed into savings every pay period. You would be wise to look into some big expenses in your budget that you can give up, or reduce, at least temporarily. For example, you may move into less expensive housing, or skip a vacation.

Sell items you do not need and get a second job. Perhaps you can get an additional job to get your down payment money. You can also seriously consider the possessions you really need and the things you could be able to sell. Multiple small items could add up to a nice sum at a garage or tag sale. You might also look into what your investments may sell for.

Borrow money from your retirement plan. Check the parameters of your specific program. It is possible to take out funds from a 401(k) for you down payment or withdraw from an Individual Retirement Account. Be sure to find out about the tax consequences, repayment terms, and penalties for withdrawing early.

Ask for help from members of your family. First-time buyers are often fortunate enough to receive help with their down payment assistance from thoughtful family members who are eager to help get them in their own home. Your family members may be willing to help you reach the goal of buying your own home.

Learn about housing finance agencies. Special loan programs are extended to buyers in certain circumstances, like low income buyers or homebuyers planning to improve houses in a certain neighborhood, among others. Working with a housing finance agency, you may be given an interest rate that is below market, down payment assistance and other benefits. Housing finance agencies can assist you with a reduced rate of interest, help with your down payment, and provide other assistance. These non-profit programs were formed to build up home ownership in particular neighborhoods.

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

• Federal Housing Administration (FHA) loans

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in helping low and moderate-income families qualify for mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA offers mortgage insurance to private lenders, enabling buyers who may not qualify for a traditional mortgage loan, to obtain financing. Down payment sums for FHA loans are less than those of typical mortgages, although these mortgages have current interest rates. The down payment can be as low as 3 percent and the closing costs can be covered by the mortgage loan.

• VA mortgages

  With a guarantee from the Department of Veterans Affairs, a VA loan assists service people and veterans. This specialized loan requires no down payment, has mimimal closing costs, and provides the advantage of a competitive interest rate. Although the VA doesn't actually issue the mortgage loans, it does issue a certificate of eligibility to apply for a VA loan.

• Piggy-back loans

  You may fund your down payment through a second mortgage that closes with the first. Most of the time, the first mortgage is for 80% of the cost of the home and the "piggyback" is for 10%. The homebuyer pays the remaining 10%, instead of come up with the usual 20% down payment.

• Carry-Back loans

  In a "carry back" situation, the seller agrees to loan you a piece of his home equity to assist you with your down payment funds. In this scenario, you would borrow the majority of the purchase price from a traditional lender and borrow the remaining amount from the seller. Usually you'll pay a slightly higher rate on the loan from the seller.

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

Need to talk about down payments? Call us at 9254610500.