Your Down Payment

Lots of buyers qualify for several different kinds of mortgages, but they don't have a lot of money to pay a down payment. Start here

Slash the budget and build up savings. Be on the look-out for ways you can trim your monthly expenses to set aside money for a down payment. You could also try enrolling in an automatic savings plan at your bank to automatically have a specific portion of your paycheck transferred into savings. You would be wise to look into some big expenses in your spending history that you can give up, or reduce, at least temporarily. For example, you might decide to move into less expensive housing, or stay local for your annual vacation.

Sell things you don't really need and get a second job. Maybe you can get a second job and build up your earnings. You can also get serious about the possessions you actually need and the items you can sell. You may have collectibles you can sell at an auction website, or quality household goods for a garage or tag sale. You can also look into what any investments you hold will bring if sold.

Borrow funds from your retirement plan. Check the parameters of your particular program. You may borrow money from a 401(k) plan for a down payment or withdraw from an IRA. Make sure to ask your plan representative about the tax ramifications, your obligation for repayment, and possible early withdrawal penalties.

Ask for a generous gift from family. First-time buyers are often fortunate enough to get help with their down payment help from gracious family members who are prepared to help get them in their first home. Your family members may be eager to help you reach the goal of buying your own home.

Contact housing finance agencies. Special mortgage loans are extended to homebuyers in certain situations, like low income purchasers or buyers planning to renovating homes in a specific part of town, among others. With the help of a housing finance agency, you can get a below market interest rate, down payment assistance and other advantages. Housing finance agencies may help you with a reduced interest rate, get you your down payment, and provide other benefits. The central mission of non-profit housing finance agencies is boosting the purchase of homes in particular places.

Learn about low-down and no-down mortgage loans.

• 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 role in assisting low and moderate-income buyers get mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA offers mortgage insurance to the private lenders, ensuring the buyers are eligible for a mortgage loan. Interest rates for an FHA mortgage usually feature the current interest rate, while the down payment for an FHA mortgage will be below those of conventional loans. The down payment may be as low as 3 percent while the closing costs can be packaged in the mortgage loan.

• VA mortgages

  VA loans are guaranteed by the Department of Veterans Affairs. Service persons and veterans can benefit from a VA loan, which typically offers a competitive interest rate, no down payment, and minimal closing costs. Although the VA does not finance the loans, it does issue a certificate of eligibility to qualify for a VA mortgage.

• Piggy-back loans

  You may fund a down payment with a second mortgage that closes with the first. Often the first mortgage covers 80% of the purchase price and the "piggyback" is for 10%. The homebuyer pays the remaining 10%, rather than putting the usual 20% down payment.

• Carry-Back loans

  In a "carry back" mortgage, the seller commits to loan you a piece of his own equity to help you get your down payment money. The buyer finances most of the purchase price through a traditional mortgage program and finances the remaining funds with the seller. Often, this kind of second mortgage will have a higher rate of interest.

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

Want to discuss your down payment? Give us a call: 9254610500.