Your Down Payment

Lots of buyers qualify for a loan, but they don't have a lot of cash to put up a down payment. We have a few suggestions

Cut expenses and save. Turn your budget upside-down to find ways you can cut expenses to go toward your down payment. You also might enroll in an automatic savings plan at your bank to have a portion of your payroll automatically deposited into savings. You could look into some big expenses in your spending history that you can give up, or trim, at least temporarily. Here are a couple of examples: you might decide to move into less expensive housing, or stay local for your annual vacation.

Work more and sell things you do not need. Try to find an additional job. This can be exhausting, but the temporary difficulty can provide your down payment money. You can also get creative about the items you migh be able to sell. You might have collectibles you can sell on an online auction, or household items for a garage or tag sale. You can also explore what any investments you own may bring if sold.

Tap into retirement funds. Investigate the parameters of your particular plan. It is possible to borrow funds from a 401(k) plan for a down payment or make a withdrawal from an Individual Retirement Account. Be sure to ask your plan representative about the tax ramifications, your obligation for repayment, and possible penalties for withdrawing early.

Ask for a gift from family. First-time homebuyers somtimes get help with their down payment assistance from thoughtful parents and other family members who are eager to help get them in their own home. Your family members may be inclined to help you reach the goal of owning your first home.

Learn about housing finance agencies. These agencies extend special mortgage programs to moderate and low income borrowers, buyers interested in remodeling a house within a specific part of the city, and additional certain types of buyers as specified by each agency. With the help of this kind of agency, you may get an interest rate that is below market, down payment help and other advantages. Housing finance agencies may assist you with a reduced rate of interest, help with your down payment, and offer other assistance. These non-profit programs to build up the value of homes in specific neighborhoods.

Learn about low-down and no-down mortgages.

  • Federal Housing Administration (FHA) mortgage loans

    The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays a significant role in assisting low to moderate-income families get mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA helps first-time homebuyers and others who would not be eligible for a conventional loan by themselves, by providing mortgage insurance to lenders. Interest rates with an FHA mortgage normally feature the current interest rate, but the down payment requirements with an FHA mortgage are lower than those of conventional loans. Closing costs might be covered by the mortgage, while the down payment could be as low as 3% of the total amount.

  • VA mortgages

    With a guarantee from the Department of Veterans Affairs, a VA loan is offered to veterens and service people. This special loan does not require a down payment, has mimimal closing costs, and offers a competitive rate of interest. Even though the mortgages are not actually provided by the VA, the department verfifies borrowers by providing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes at the same time as the first. In most cases the first mortgage is for 80% of the cost of the home and the "piggyback" funds 10%. Instead of the usual 20 percent down payment, the homebuyer will just have to pull together the remaining 10 percent.

  • Carry-Back loans

    In a "carry back" mortgage, the seller agrees to loan you a piece of his home equity to help you get your down payment money. The buyer finances most of the purchase price with a traditional mortgage program and finances the remaining funds with the seller. Typically you'll pay a somewhat higher interest rate with the loan from the seller.

No matter your method of putting together down payment funds, the satisfaction of living in your own home will be just as great!

Need to talk about down payments? Call us: (405) 615-8543.

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