Your Down Payment

Lots of buyers can qualify for several different kinds of mortgages, but they don't have much to put up a down payment. Start here

Tighten your belt and save. Turn your budget upside-down to discover ways you can cut expenses to save for your down payment. There are bank programs through which some of your paycheck is automatically transferred into savings each pay period. You might look into some big expenses in your spending history that you can give up, or trim, at least temporarily. For example, you might decide to move into less expensive housing, or stay close to home for your vacation.

Sell items you don't need and find a part-time job. Try to find an additional job. This can be exhausting, but the temporary trial can provide your down payment money. You can also seriously consider the possessions you really need and the items you can put up for sale. Maybe you own desirable items you can sell on an online auction, or quality household items for a tag or garage sale. You could also explore what any investments you have may bring if sold.

Borrow funds from a retirement plan. Check the provisions of your particular program. Some people get down payment money from withdrawing what they need from IRAs or borrowing from 401(k) plans. Make sure you understand the tax consequences, repayment terms, and penalties for withdrawing early.

Request a generous gift from your family. Many homebuyers are often lucky enough to receive down payment help from caring parents and other family members who may be willing to help them get into their own home. Your family members may be inclined to help you reach the goal of buying your first home.

Learn about housing finance agencies. Provisional mortgage programs are given to buyers in specific situations, such as low income buyers or buyers planning to renovating houses in a certain place, among others. With the help of this type of agency, you can receive an interest rate that is below market, down payment help and other perks. These kinds of agencies can assist eligible homebuyers with a reduced interest rate, get you your down payment, and offer other assistance. The principal mission of non-profit housing finance agencies is boosting home ownership in certain parts of the city.

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

• 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 assisting low to moderate-income Americans qualify for mortgage loans. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA helps first-time homebuyers and others who would not be able to qualify for a traditional mortgage loan by themselves, by providing mortgage insurance to private lenders. Interest rates for an FHA mortgage normally feature the going interest rate, while the down payment with an FHA mortgage are smaller than those of conventional loans. The required down payment can go as low as three percent while the closing costs could be included in the mortgage.

• VA mortgages

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

• Piggy-back loans

  A piggy-back loan is a second mortgage that you close with the first. Most of the time, the piggyback loan takes care of 10 percent of the home's amount, while the first mortgage covers 80 percent. The homebuyer pays the remaining 10%, instead of putting the typical 20% down payment.

• Carry-Back loans

  In the option of a seller "carrying back a second mortgage," the seller loans you part of his or her home equity. The buyer finances most of the purchase price with a traditional mortgage program and borrows the remaining funds from the seller. Usually this kind of second mortgage has higher interest.

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