Your Down Payment

Many folks who are looking to buy a new house qualify for several different kinds of mortgages, but they can't afford a large down payment. Here's where to get started

Slash your budget and build up savings. Look for ways you can reduce your monthly expenditures to set aside money for a down payment. There are bank programs in which a specific portion of your paycheck is automatically placed into a savings account every pay period. You would be wise to 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 annual vacation.

Sell items you don't need and get a second job. Look for a second job. This can be rough, but the temporary difficulty can provide your down payment money. You can also get creative about the items you can put up for sale. A closetful of small items may add up to a nice sum at a garage or tag sale. You can also look into what any investments you have may bring if sold.

Borrow from retirement funds. Investigate the parameters of your particular plan. Many homebuyers get down payment money by withdrawing funds from Individual Retirement Accounts or borrowing from 401(k) programs. Make sure you comprehend the tax consequences, your obligation for repayment, and possible penalties for withdrawing early.

Ask for help from generous family members. First-time homebuyers are often fortunate enough to get help with their down payment help from caring parents and other family members who may be able to help get them in their own home. Your family members may be eager to help you reach the milestone of having your own home.

Learn about housing finance agencies. These types of agencies offer special mortgate loan programs- for low and moderate-income buyers, buyers with an interest in sprucing up a home within a targeted part of the city, and additional specific types of buyers as specified by each finance agency. With the help of this type of agency, you can receive an interest rate that is below market, down payment help and other advantages. Housing finance agencies can assist you with a reduced interest rate, get you your down payment, and provide other advantages. The principal mission of not-for-profit housing finance agencies is boosting the purchase of homes in targeted areas.

Find out about low-down and no-down mortgage loan programs.

  • Federal Housing Administration (FHA) mortgage 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 qualify for mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals in getting mortgages. FHA aids first-time homebuyers and others who would not be eligible for a typical mortgage by themselves, by offering mortgage insurance to lenders. Down payment amounts for FHA mortgages are lower than those of typical mortgages, although these loans hold current rates of interest. The down payment can be as low as 3 percent and the closing costs might be covered by the mortgage loan.

  • VA loans

    Guaranteed by the Department of Veterans Affairs, a VA loan assists veterens and service people. This special loan requires no down payment, has limited closing costs, and provides the benefit of a competitive interest rate. While the VA doesn't actually provide the mortgage loans, it does certify eligibility to apply for a VA mortgage.

  • Piggy-back loans

    You may finance your down payment through a second mortgage that closes along with the first. In most cases the first mortgage is for 80% of the cost of the home and the "piggyback" funds 10%. In contrast to the traditional 20 percent down payment, the homebuyer just has 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.. You would borrow the majority of the purchase price from a traditional mortgage lending institution and finance the remainder with the seller. Generally, this type of second mortgage will have higher interest.

The feeling of accomplishment will be the same, no matter how you manage to get together the down payment. Your new home will be well worth it!

Want to discuss your down payment? Give us a call at 706-860-5514.

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