Your Down Payment

Lots of borrowers can qualify for various loan programs, but they can't afford a large down payment. Do you want to buy a new home, but aren't sure how to get together a down payment?

Cut expenses and save. Be on the look-out for ways to reduce your expenditures to put away money for a down payment. There are bank programs through which some of your paycheck is automatically placed into a savings account every pay period. Some effective approaches to put together funds include moving into less expensive housing, and staying home for your family vacation for a year or two.

Work more and sell things you do not need. Try to get an additional job. This can be rough, but the temporary difficulty can help you get your down payment. In addition, you can make a comprehensive list of things you may be able to sell. Unused gold jewelry can be sold at local jewelry stores. A closetful of small things can add up to a nice sum at a garage or tag sale. You could also look into what any investments you own will sell for.

Borrow from retirement funds. Investigate the provisions of your retirement program. Many homebuyers get down payment money from withdrawing from Individual Retirement Accounts or borrowing from their 401(k) plans. You will need to make sure you are clear about any penalties, the way this may affect on taxes, and repayment obligation.

Ask for a generous gift from family. Many homebuyers are often fortunate enough to get help with their down payment help from giving parents and other family members who may be eager to help them get into their first home. Your family members may be eager to help you reach the goal of buying your own home.

Learn about housing finance agencies. Provisional loan programs are provided to homebuyers in certain circumstances, such as low income purchasers or people planning to improve houses in a particular area, among others. Financing through a housing finance agency, you may be given an interest rate that is below market, down payment assistance and other perks. Housing finance agencies may help you with a lower rate of interest, help with your down payment, and offer other advantages. These non-profit programs to build up community in specific neighborhoods.

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

  • Federal Housing Administration (FHA) loans

    The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in assisting low to moderate-income families get mortgage loans. 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 private lenders, making the buyers eligible for financing. Down payment requirements for FHA loans are lower than those of typical mortgage loans, even though these mortgages have current rates of interest. The down payment can be as low as three percent and the closing costs could be covered by the mortgage.

  • VA mortgage loans

    VA loans are backed by the Department of Veterans Affairs. Service persons and veterans can benefit from a VA loan, which generally offers a competitive interest rate, no down payment, and minimal closing costs. Even though the mortgages don't originate from the VA, the office verfifies 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. Most of the time, the first mortgage covers 80% of the cost of the home and the "piggyback" is for 10%. The homebuyer covers the remaining 10%, instead of come up with the typical 20% down payment.

  • Carry-Back loans

    In a "carry back" situation, the seller commits to lend you part of his home equity to assist you with your down payment money. You would finance the largest portion of the purchase price with a traditional mortgage lender and borrow the remaining amount from the seller. Usually this form of second mortgage has a higher rate of interest.

The satisfaction will be the same, no matter which approach you use to come up with your down payment. Your brand new home will be well worth it!

Want to discuss down payment options? Call us: 310-379-5997.

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