Your Down Payment

Many borrowers qualify for various loan programs, but they don't have a lot of cash to put up the standard down payment. We have a few ideas

Cut expenses and save. Be on the look-out for ways to trim your monthly expenses to save toward a down payment. You might also try enrolling in an automatic savings plan to have a portion of your pay automatically moved into a savings account. You might look into some big expenses in your spending history that you can do without, or reduce, at least temporarily. Here are a couple of examples: you might move into less expensive housing, or stay local for your vacation.

Work a second job and sell things you do not need. Perhaps you can get an additional job and build up your earnings. In addition, you can put together an exhaustive inventory of items you can sell. Broken gold jewelry can be sold at local jewelry stores. Multiple small things can add up to a nice sum at a garage or tag sale. You might also research what any investments you have could bring if sold.

Borrow from retirement funds. Check the parameters of your particular program. You can take out funds from a 401(k) for you down payment or withdraw from an IRA. Make sure you are knowledgable about any penalties, the way this may affect on income taxes, and repayment obligation.

Request a gift from your family. Many homebuyers are sometimes lucky enough to receive down payment assistance from giving family members who may be anxious to help get them in their own home. Your family members may be pleased to help you reach the goal of having your first home.

Learn about housing finance agencies. These agencies provide provisional mortgate loan programs- for low and moderate-income homebuyers, buyers interested in renovating a house within a targeted part of the city, and additional certain types of buyers as defined by the finance agency. Working with this kind of agency, you may be given a below market interest rate, down payment help and other perks. Housing finance agencies may help eligible buyers with a reduced interest rate, get you your down payment, and offer other assistance. These non-profit programs to build up community in specific areas.

Research no-down and low-down mortgage loans.

  • Federal Housing Administration (FHA) mortgages

    The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays a vital role in assisting low and moderate-income Americans qualify for mortgages. 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, enabling new homebuyers who may not qualify for a conventional mortgage loan, to obtain financing. Down payment amounts for FHA mortgages are smaller than those of conventional mortgage loans, although these mortgages come with current interest rates. Closing costs can be financed within the mortgage, while your down payment may be as low as 3 percent of the total amount.

  • VA loans

    Guaranteed by the Department of Veterans Affairs, a VA loan is offered to service people and veterans. This specialized loan requires no down payment, has limited closing costs, and offers a competitive interest rate. While it's true that the loans don't originate from the VA, the department verfifies applicants by issuing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes along with the first. Usually the piggyback loan is for 10 percent of the home's price, while the first mortgage finances 80 percent. Rather than the usual 20 percent down payment, the homebuyer will just have to pull together the remaining 10 percent.

  • Carry-Back loans

    In the case 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 lending institution and borrow the remaining amount from the seller. Often, this form of second mortgage has higher interest.

The satisfaction will be the same, no matter how you manage to come up with your down payment. Your new home will be your reward!

Need to talk about down payments? Call us: 8139881776.

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