Your Down Payment

Lots of buyers can easily qualify for various loan programs, 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?

Reduce expenses and save. Be on the look-out for ways to trim your monthly expenses to set aside funds for a down payment. You might also try enrolling in an automatic savings plan to automatically have a set amount from your paycheck deposited into savings. You would be wise to 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 stay local for your vacation.

Work a second job and sell items you do not need. Maybe you can find an additional job and save your earnings. You can also get creative about the things you migh be able to sell. A closetful of small things can add up to a nice sum at a garage or tag sale. You might also look into what any investments you hold will bring if sold.

Borrow from your retirement plan. Investigate the provisions of your specific program. It is possible to take out money from a 401(k) for you down payment or make a withdrawal from an Individual Retirement Account. Be sure you know about any penalties, the effect this will have on your taxes, and repayment obligation.

Request a gift from your family. Many buyers are often fortunate enough to receive help with their down payment help from giving family members who are willing to help get them in their own home. Your family members may be willing to help you reach the milestone of having your own home.

Contact housing finance agencies. Provisional mortgate loan programs are provided to buyers in specific situations, like low income buyers or homebuyers planning to improve houses in a particular place, among others. Financing with a housing finance agency, you can be given an interest rate that is below market, down payment assistance and other benefits. Housing finance agencies may assist you with a reduced interest rate, get you your down payment, and offer other assistance. The principal purpose of not-for-profit housing finance agencies is build up residential ownership in targeted parts of the city.

Find out about low-down and no-down mortgage loan programs.

  • 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 part in helping low to moderate-income individuals qualify for 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 homebuyers who will not qualify for a conventional loan, to get financing. Down payment sums for FHA loans are smaller than those of traditional mortgages, even though these mortgages come with current rates of interest. The down payment can go as low as 3 percent and the closing costs may be included in the mortgage loan.

  • VA loans

    VA loans are guaranteed by the U.S. Department of Veterans Affairs. Service persons and veterans qualify for a VA loan, which typically offers a competitive fixed interest rate, no down payment, and minimal closing costs. Although the VA doesn't issue the mortgages, it does issue a certificate of eligibility to qualify for a VA mortgage.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes along with the first. Usually the first mortgage is for 80% of the purchase amount and the "piggyback" is for 10%. The homebuyer pays the remaining 10%, instead of needing to pull together the typical 20% down payment.

  • Carry-Back loans

    In a "carry back" agreement, the seller agrees to lend you part of his own equity to help you get your down payment funds. The buyer funds the majority of the purchase price through a traditional mortgage program and finances the remaining funds with the seller. Typically you will pay a slightly higher interest rate with the loan from the seller.

No matter how you gather your down payment funds, the satisfaction of reaching the goal of owning your own home will be just as sweet!

Need to talk about down payment options? Give us a call: 504-866-5626.

Mortgage Questions?

Do you have a question regarding a mortgage program?

Contact Information
Your Question