Your Down Payment

Many buyers qualify for a loan, but they don't have a lot of money to put up a down payment. We have a few ideas

Cut expenses and save. Be on the look-out for ways you can trim your expenses to set aside money for a down payment. You could also try enrolling in an automatic savings plan to have a percentage of your pay automatically deposited into your savings account. Some practical strategies to put together funds include moving into a residence that is less expensive, and skipping your family vacation for a year or two.

Sell things you don't really need and get a part-time job. Try to get a second job. This can be rough, but the temporary trial can provide your down payment money. You can also get creative about the items you migh be able to put up for sale. Multiple small items may add up to a fair amount at a garage or tag sale. Also, you might want to think about selling any investments you own.

Borrow your down payment from your retirement plan. Explore the specifics for your individual plan. It is possible to borrow funds from a 401(k) plan for you down payment or withdraw from an IRA. Make sure you are knowledgable about any penalties, the effect this could have on income taxes, and repayment terms.

Request a generous gift from family. Many buyers somtimes get help with their down payment assistance from giving 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 buying your first home.

Learn about housing finance agencies. Special mortgate loan programs are extended to buyers in specific situations, such as low income homebuyers or buyers looking to renovating homes in a specific part of town, among others. Financing through a housing finance agency, you can receive a below market interest rate, down payment assistance and other incentives. These types of agencies can assist you with a lower interest rate, help with your down payment, and provide other assistance. These non-profit agencies were established to build up home ownership in specific places.

Explore no-down and low-down mortgage loan programs.

  • 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 aiding low to moderate-income individuals get mortgage loans. An office of the U.S. 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 financing. Down payment sums for FHA loans are smaller than those for typical mortgage loans, even though these mortgages come with average interest rates. The required down payment can go as low as three percent while the closing costs can be covered by the mortgage.

  • VA loans

    VA loans are backed by the U.S. Department of Veterans Affairs. Veterens and service people are eligible for a VA loan, which typically offers a reasonable interest rate, no down payment, and minimal closing costs. While it's true that the loans are not actually financed by the VA, the department certifies borrowers by issuing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that you close along with the first. Most of the time, the piggyback loan is for 10 percent of the home's amount, while the first mortgage covers 80 percent. In contrast to the usual 20 percent down payment, the homebuyer just has to pull together the remaining 10 percent.

  • Carry-Back loans

    In the option of the seller "carrying back a second mortgage," the seller loans you part of his or her home equity. You would finance the majority of the purchase price with a traditional mortgage lender and finance the remaining amount with the seller. Usually this type of second mortgage has a higher rate of interest.

The satisfaction will be the same, no matter which method you use to come up with the down payment. Your brand new home will be your reward!

Need to talk about the best options for down payments? Give us a call at 706-860-5514.

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