Your Down Payment

Lots of buyers can qualify for a mortgage loan, but they can't afford a large down payment. Want to buy a new house, but don't know how you should put together your down payment?

Tighten your belt and save. Scrutinize your budget to uncover extra money to go toward your down payment. There are bank programs in which some of your paycheck is automatically deposited into savings each pay period. Some effective methods to put together funds include moving into a residence that is less expensive, and skipping your vacation for a year or two.

Work a second job and sell items you do not need. Perhaps you can get a second job and save your earnings. You can also seriously consider the possessions you actually need and the things you could be able to sell. A closetful of small things might add up to a nice sum at a garage or tag sale. You could also research what any investments you hold will bring if sold.

Borrow money from your retirement plan. Investigate the provisions of your retirement plan. It is possible to take out money from a 401(k) plan for you down payment or make a withdrawal from an Individual Retirement Account. Make sure to learn about the tax ramifications, repayment terms, and possible early withdrawal penalties.

Ask for a generous gift from family. Many buyers are often fortunate enough to get help with their down payment help from caring family members who are able to help them get into their own home. Your family members may be pleased to help you reach the milestone of owning your first home.

Learn about housing finance agencies. These types of agencies provide provisional mortgate loan programs to moderate and low income homebuyers, buyers interested in sprucing up a residence within a targeted part of the city, and other groups as specified by each agency. Financing through this kind of agency, you probably will be given a below market interest rate, down payment assistance and other incentives. Housing finance agencies can assist eligible buyers with a lower interest rate, get you your down payment, and offer other assistance. The primary purpose of non-profit housing finance agencies is boosting the purchase of homes in specific places.

Find out about low-down and no-down mortgages.

  • FHA mortgage loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a vital part in helping 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) assists homebuyers in qualifying for mortgage loans. FHA aids first-time buyers and others who would not be eligible for a traditional mortgage loan on their own, by offering mortgage insurance to the lenders. Down payment requirements for FHA loans are smaller than those for traditional mortgage loans, even though these mortgages hold average interest rates. Closing costs can be included in the mortgage, and your down payment may be as low as 3% of the purchase price.

  • VA mortgage loans

    VA loans are guaranteed by the Department of Veterans Affairs. Service persons and veterans can benefit from a VA loan, which usually offers a low fixed rate of interest, no down payment, and reduced closing costs. Even though the VA doesn't finance the mortgage loans, it does issue a certificate of eligibility to apply for a VA mortgage.

  • Piggy-back loans

    You can fund a down payment through a second mortgage that closes at the same time as the first. Usually the first mortgage covers 80% of the cost of the home and the "piggyback" funds 10%. The homebuyer covers the remaining 10%, rather than putting the typical 20% down payment.

  • Carry-Back loans

    In a "carry back" situation, the seller agrees to lend you a piece of his own equity to help you with your down payment money. The buyer finances the majority of the purchase price through a traditional mortgage program and borrows the remainder from the seller. Typically you'll pay a somewhat higher interest rate on the loan financed by the seller.

The feeling of accomplishment will be the same, no matter how you manage to come up with your down payment. Your brand new home will be well worth it!

Need to talk about down payments? Give us a call at 310-379-5997.

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