Your Down Payment

Many borrowers qualify for several different kinds of mortgages, but they don't have much to put up the standard down payment. Here's where you start

Tighten your belt and save. Scrutinize your budget to uncover ways you can cut expenses to go toward your down payment. Also, you can look into bank programs through which some of your paycheck is automatically placed into savings every pay period. You might look into some big expenses in your budget that you can give up, or trim, at least temporarily. For example, you may decide to move into less expensive housing, or skip a family vacation.

Work more and sell things you don't need. Perhaps you can get a second job and save your earnings. You can also get creative about the items you migh be able to sell. Multiple small items may add up to a nice sum at a garage or tag sale. You might also look into what any investments you have will bring if sold.

Tap into retirement funds. Research the details of your individual plan. Many people get down payment money from withdrawing funds from Individual Retirement Accounts or borrowing from 401(k) plans. Make sure you understand about any penalties, the effect this could have on your income taxes, and repayment obligation.

Ask for a gift from your family. Many homebuyers somtimes get down payment assistance from giving parents and other family members who may be willing to help get them in their first home. Your family members may be pleased to help you reach the milestone of having your own home.

Research housing finance agencies. These types of agencies provide provisional mortgage programs for moderate and low income buyers, buyers with an interest in renovating a house within a targeted area, and other particular types of buyers as specified by each agency. With the help of a housing finance agency, you can be given a below market interest rate, down payment help and other advantages. Housing finance agencies may help eligible buyers with a lower rate of interest, help with your down payment, and provide other assistance. These non-profit agencies exist to build up community in certain places.

Find out 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 a significant part in assisting low to moderate-income buyers get mortgages. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA aids first-time buyers and others who might not be able to qualify for a typical loan on their own, by providing mortgage insurance to the private lenders. Down payment sums for FHA mortgages are below those with typical mortgage loans, although these loans hold average interest rates. The down payment can go as low as 3 percent while the closing costs may be financed in the mortgage.

  • VA mortgages

    VA loans are backed by the U.S. Department of Veterans Affairs. Veterens and service people are eligible for a VA loan, which generally offers a reasonable interest rate, no down payment, and minimal closing costs. While the loans are not actually financed by the VA, the office verfifies borrowers by issuing eligibility certificates.

  • Piggy-back loans

    You may finance your down payment with a second mortgage that closes at the same time as the first. Generally the piggyback loan is for 10 percent of the home's amount, while the first mortgage finances 80 percent. Instead of the usual 20 percent down payment, the homebuyer just has to cover the remaining 10 percent.

  • Carry-Back loans

    In the option of a seller "carrying back a second mortgage," the seller loans you part of his or her equity. You would finance the majority of the purchase price with a traditional mortgage lending institution and borrow the remainder from the seller. Typically you will pay a somewhat higher rate with the loan from the seller.

No matter your strategy of pulling together down payment money, the satisfaction of owning your own home will be just as great!

Need to talk about down payment options? Give us a call at (772) 252-6724.