Your Down Payment

Many borrowers qualify for various loan programs, but they don't have much to pay a down payment. Start here

Reduce expenses and save. Be on the look-out for ways to reduce your expenditures to set aside funds for a down payment. You might also decide to enroll in an automatic savings plan to automatically have a set amount from your paycheck moved into your savings account. You might look into some big expenses in your spending history that you can live without, or reduce, at least temporarily. For example, you may move into less expensive housing, or skip a family vacation.

Sell things you do not really need and get a second job. Look for a second job. This can be exhausting, but the temporary trial can provide your down payment money. You can also seriously consider the possessions you actually need and the things you can put up for sale. A closetful of small things can add up to a nice sum at a garage or tag sale. Also, you can think about selling any investments you own.

Tap into your retirement funds. Research the details of your individual plan. It is possible to borrow money from a 401(k) plan for a down payment or make a withdrawal from an Individual Retirement Account. Make sure you comprehend the tax consequences, your obligation for repayment, and early withdrawal penalties.

Ask for help from members of your family. First-time buyers somtimes receive down payment assistance from giving family members who may be willing to help get them in their first home. Your family members may be eager to help you reach the milestone of owning your first home.

Research housing finance agencies. Special mortgage programs are offered to buyers in certain situations, such as low income buyers or buyers looking to renovating houses in a targeted part of town, among others. With the help of this type of agency, you may receive a below market interest rate, down payment help and other perks. Housing finance agencies can assist you with a lower rate of interest, get you your down payment, and provide other advantages. These non-profit programs to build up home ownership in certain places.

Research no-down and low-down mortgages.

• Federal Housing Administration (FHA) mortgage loans

  The Federal Housing Administration (FHA), which is inside the U.S. Department of Housing and Urban Development (HUD), plays an important role in helping low and moderate-income buyers get mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers who need to get home financing. FHA aids first-time homebuyers and others who might not be able to qualify for a typical mortgage loan by themselves, by offering mortgage insurance to private lenders. Interest rates with an FHA mortgage generally feature the going interest rate, but the down payment amounts for an FHA mortgage are lower than those of conventional loans. Closing costs might be financed in the mortgage, and your down payment may be as low as 3 percent of the purchase price.

• VA mortgage loans

  With a guarantee from the Department of Veterans Affairs, a VA loan qualifies service people and veterans. This particular loan requires no down payment, has reduced closing costs, and offers a competitive interest rate. Although the VA does not actually issue the mortgages, it does certify eligibility to apply for a VA mortgage.

• Piggy-back loans

  You may fund your down payment using a second mortgage that closes along with the first. Usually the piggyback loan is for 10 percent of the purchase price, while the first mortgage covers 80 percent. Instead of the traditional 20 percent down payment, the homebuyer just has to pull together the remaining 10 percent.

• Carry-Back loans

  In a "carry back" mortgage, the seller commits to loan you part of his home equity to help you with your down payment money. The buyer funds most of the purchase price with a traditional mortgage program and borrows the remainder from the seller. Generally, this kind of second mortgage has higher interest.

Need to talk about down payment options? Give us a call: 866-300-1550.