Putting Together Your Down Payment

Many borrowers qualify for a loan, but they can't afford a large down payment. Get started here

Cut expenses and save. Turn your budget upside-down to discover extra money to go toward your down payment. You might also try enrolling in an automatic savings plan to automatically have a predetermined amount from your take-home pay transferred into savings. Some effective strategies to build up funds include moving into a residence that is less expensive, and skipping your vacation for a year or two.

Work more and sell items you don't need. Maybe you can find a second job to get your down payment money. You can also seriously consider the possessions you actually need and the things you can put up for sale. Multiple small things can add up to a nice sum at a garage or tag sale. Also, you might want to consider selling any investments you own.

Borrow money from a retirement plan. Research the details of your particular plan. It is possible to take out funds from a 401(k) plan for a down payment or perform a withdrawal from an Individual Retirement Account. Make sure you comprehend the tax ramifications, your obligation for repaying funds, and penalties for withdrawing early.

Request a gift from your family. Many homebuyers are sometimes fortunate enough to get down payment help from thoughtful parents and other family members who are able to help get them in their first home. Your family members may be happy at the chance to help you reach the milestone of buying your first home.

Research housing finance agencies. These agencies offer special mortgage programs for moderate and low income homebuyers, buyers interested in rehabilitating a home within a specific part of the city, and additional certain kinds of buyers as defined by the finance agency. Working with a housing finance agency, you can be given an interest rate that is below market, down payment help and other incentives. These kinds of agencies can assist eligible homebuyers with a lower rate of interest, get you your down payment, and provide other assistance. These non-profit programs were formed to build up the value of homes in specific areas.

Explore no-down and low-down mortgage loans.

• FHA mortgages

  The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays a critical role in aiding low to moderate-income buyers get mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers in qualifying for mortgage loans. FHA provides mortgage insurance to private lenders, making the buyers eligible for a loan. Down payment sums for FHA loans are less than those of traditional mortgages, although these mortgages come with current interest rates. The down payment may be as low as three percent and the closing costs may be covered by the mortgage loan.

• VA mortgages

  VA loans are guaranteed by the Department of Veterans Affairs. Veterens and service people can qualify for a VA loan, which generally offers a competitive fixed rate of interest, no down payment, and limited closing costs. Although the VA does not finance the loans, it does certify eligibility to qualify for a VA loan.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes with the first. Usually the first mortgage is for 80% of the purchase amount and the "piggyback" funds 10%. The borrower 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 home equity to help you get your down payment funds. The buyer finances the highest percentage of the purchase price with a traditional mortgage program and finances the remaining funds with the seller. Often, this type of second mortgage has a higher rate of interest.

The feeling of accomplishment will be the same, no matter which strategy you use to come up with your down payment. Your brand new home will be your reward!

Need to talk about your down payment? Give us a call: 5806959369.