Your Down Payment

Many people who would like to purchase a new house qualify for various loan programs, but they can't afford a large down payment. Here's where to get started

Cut expenses and save. Scrutinize your budget to discover ways you can cut expenses to save for your down payment. You might also try enrolling in an automatic savings plan at your bank to have a percentage of your payroll automatically transferred into savings. You might look into some big expenses in your budget that you can live without, or trim, at least temporarily. Here are a couple of examples: you may decide to move into less expensive housing, or stay local for your vacation.

Work more and sell items you do not need. Try to find a second job. This can be exhausting, but the temporary difficulty can provide your down payment money. In addition, you can put together an exhaustive list of items you may be able to sell. Unused gold jewelry can be sold at local jewelry stores. You may own collectibles you can sell at an auction website, or household goods for a garage or tag sale. Also, you might want to look into selling any investments you hold.

Borrow money from your retirement plan. Research the specifics of your individual plan. You can take out money from a 401(k) for you down payment or withdraw from an Individual Retirement Account. Make sure you comprehend the tax ramifications, repayment terms, and possible penalties for withdrawing early.

Ask for assistance from generous family members. Many homebuyers somtimes get down payment help from caring parents and other family members who are anxious to help them get into their first home. Your family members may be eager to help you reach the goal of buying your first home.

Learn about housing finance agencies. Provisional mortgage programs are provided to buyers in certain situations, like low income buyers or buyers looking to remodel homes in a specific place, among others. With the help of a housing finance agency, you probably will receive a below market interest rate, down payment help and other benefits. These types of agencies may help you with a lower interest rate, get you your down payment, and offer other advantages. These non-profit agencies were formed to build up community in certain places.

Find out 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 an important role in helping low and moderate-income individuals get mortgage loans. Part 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, helping the buyers to become eligible for a mortgage loan. Interest rates with an FHA loan usually feature the current interest rate, while the down payment for an FHA mortgage will be less than those of conventional loans. Closing costs can be financed within the mortgage, and your down payment could be as low as 3 percent of the total.

  • VA loans

    With a guarantee from the Department of Veterans Affairs, a VA loan qualifies service people and veterans. This specialized loan does not require a down payment, has reduced closing costs, and provides the advantage of a competitive rate of interest. Although the VA does not actually issue the mortgage loans, it does certify eligibility to apply for a VA mortgage.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that you close along with the first. Most of the time, the piggyback loan takes care of 10 percent of the home's price, and the first mortgage finances 80 percent. Instead of the traditional 20 percent down payment, the homebuyer will just have to cover the remaining 10 percent.

  • Carry-Back loans

    We a seller carries back a second mortgage, the seller loans you part of his or her equity. The buyer finances the majority of the purchase price with a traditional mortgage program and borrows the remainder from the seller. Generally, this kind of second mortgage will have higher interest.

No matter your method of pulling together down payment money, the satisfaction of reaching the goal of living in your own home will be just as great!

Want to discuss your down payment? Call us at 954.920.9799.

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