Your Down Payment

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Many folks who are looking to purchase a new home qualify for various loan programs, but they can't afford a large down payment. Do you want to look into getting a new house, but aren't sure how you should put together a down payment?

Reduce expenses and save. Be on the look-out for ways you can reduce your expenditures to set aside money for a down payment. Also, you can look into bank programs in which a portion of your paycheck is automatically placed into savings each pay period. Some effective ways to put together funds include moving into less expensive housing, and staying local for your family vacation this year.

Sell items you don't really need and get a second job. Try to find a second job. This can be rough, but the temporary trial can help you get your down payment. In addition, you can put together a comprehensive inventory of things you may be able to sell. Unworn gold jewelry can bring a good price from local jewelers. You may have collectibles you can put up for sale on an online auction, or household items for a tag or garage sale. Also, you can think about selling any investments you own.

Borrow your down payment from your retirement plan. Research the specifics of your particular plan. It is possible to borrow funds from a 401(k) plan for a down payment or withdraw from an Individual Retirement Account. You will want to ensure you are knowledgeable about any penalties, the way this will affect on taxes, and repayment terms.

Request a generous gift from family. First-time homebuyers sometimes get help with their down payment assistance from thoughtful family members who are eager to help get them in their own home. Your family members may be pleased to help you reach the goal of owning your own home.

Contact housing finance agencies. Provisional loan programs are extended to homebuyers in specific situations, like low income purchasers or future homeowners looking to remodel homes in a particular part of town, among others. Financing through this type of agency, you probably will be given a below market interest rate, down payment help and other advantages. These kinds of agencies may assist you with a lower interest rate, get you your down payment, and provide other assistance. These non-profit programs to build up the value of homes in particular neighborhoods.

Learn about low-down and no-down mortgage loan programs.

  • FHA mortgages

    The Federal Housing Administration (FHA), which is inside the U.S. Department of Housing and Urban Development (HUD), plays a significant part in helping 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 offers mortgage insurance to private lenders, ensuring the buyers are eligible for a loan. Down payment amounts for FHA loans are below those for conventional mortgages, even though these mortgages come with current interest rates. The required down payment can be as low as 3 percent while the closing costs could be covered by the mortgage.

  • VA loans

    Guaranteed by the Department of Veterans Affairs, a VA loan is offered to service people and veterans. This special loan requires no down payment, has minimal closing costs, and provides a competitive interest rate. Even though the mortgages don't originate from the VA, the office verifies applicants by providing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that you close at the same time as the first. Generally the first mortgage is for 80% of the purchase amount and the "piggyback" funds 10%. In contrast to the usual 20 percent down payment, the buyer will just have to pull together the remaining 10 percent.

  • Carry-Back loans

    In a "carry back" agreement, the seller agrees to lend you part of his own equity to help you get your down payment money. In this scenario, you would borrow the largest portion of the purchase price from a traditional lender and finance the remaining amount with the seller. Often, this kind of second mortgage has higher interest.

The satisfaction will be the same, no matter which strategy you use to pull together the down payment. Your brand new home will be worth it!

Want to discuss the best options for down payments? Give us a call at (713)484-6300.