Putting Together Your Down Payment

Many buyers can qualify for a loan, but they don't have much to put up a down payment. Want to look into getting a new home, but don't know how you should put together a down payment?

Cut expenses and save. Be on the look-out for ways to trim your monthly expenses to put away money for a down payment. You might also decide to enroll in an automatic savings plan to automatically have a predetermined amount from your take-home pay moved into a savings account. You could look into some big expenses in your spending history that you can give up, or reduce, at least temporarily. For example, you may decide to move into less expensive housing, or skip a family vacation.

Work a second job and sell items you don't need. Try to get a second job. This can be exhausting, but the temporary difficulty can help you get your down payment. You can also seriously consider the possessions you really need and the items you can put up for sale. Maybe you have desirable items you can sell on an online auction, or quality household goods for a garage or tag sale. Also, you can consider selling any investments you hold.

Tap into retirement funds. Check the provisions of your particular plan. It is possible to borrow funds from a 401(k) for you down payment or perform a withdrawal from an IRA. You will need to ensure you understand about any penalties, the effect this may have on your taxes, and repayment terms.

Ask for assistance from family members. Many buyers somtimes receive help with their down payment assistance from gracious parents and other family members who are eager to help get them in their first home. Your family members may be willing to help you reach the goal of owning your first home.

Research housing finance agencies. Provisional mortgate loan programs are extended to homebuyers in certain circumstances, like low income homebuyers or homebuyers looking to improve homes in a particular part of town, among others. With the help of this kind of agency, you may receive a below market interest rate, down payment help and other perks. These kinds of agencies can help you with a lower rate of interest, help with your down payment, and offer other advantages. These non-profit agencies exist to build up home ownership in certain areas.

Explore no-down and low-down mortgages.

  • FHA loans

    The Federal Housing Administration (FHA), which is inside the U.S. Department of Housing and Urban Development (HUD), plays an important role in assisting low to moderate-income Americans 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, enabling buyers who may not qualify for a typical loan, to get a mortgage. Interest rates for an FHA loan usually feature the market interest rate, but the down payment requirements for an FHA mortgage are below those of conventional loans. Closing costs may be included in the mortgage, and your down payment may be as low as 3 percent of the purchase price.

  • VA mortgage loans

    VA loans are guaranteed by the U.S. Department of Veterans Affairs. Veterens and service people can get a VA loan, which usually offers a low fixed rate of interest, no down payment, and reduced closing costs. While the VA doesn't actually provide the mortgages, it does issue a certificate of eligibility to apply for a VA loan.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes at the same time as the first. Often the first mortgage covers 80% of the cost of the home and the "piggyback" funds 10%. Instead of the traditional 20 percent down payment, the homebuyer just has to pull together the remaining 10 percent.

  • Carry-Back loans

    We a seller carries back a second mortgage, the you borrow a portion of the seller's home equity.. The buyer funds most of the purchase price through a traditional mortgage program and borrows the remaining funds from the seller. Usually you'll pay a somewhat higher rate with the loan from the seller.

No matter how you gather your down payment money, the thrill of reaching the goal of living in your own home will be just as great!

Need to talk about your down payment? Give us a call: 714-970-9700.

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