Your Down Payment

Many buyers qualify for several different kinds of mortgages, but they don't have much to put up a down payment. Want to look into getting a new home, but aren't sure how you should get together your down payment?

Cut expenses and save. Scrutinize the budget to discover ways you can cut expenses to save for your down payment. Also, you can look into bank programs in which a portion of your paycheck is automatically deposited into savings each pay period. Some effective approaches to put together funds include moving into housing that is less expensive, and skipping a year's vacation.

Sell things you don't really need and find a second job. Try to get an additional job. This can be exhausting, but the temporary difficulty can help you get your down payment. Additionally, you can put together an exhaustive list of items you may be able to sell. Broken gold jewelry can be sold at local jewelers. You may own collectibles you can put up for sale on an online auction, or household items for a garage or tag sale. Also, you can look into selling any investments you hold.

Borrow money from a retirement plan. Explore the details for your individual plan. Some people get down payment money by withdrawing from Individual Retirement Accounts or borrowing from 401(k) programs. You will want to ensure you are knowledgable about any penalties, the effect this will have on your taxes, and repayment obligation.

Ask for assistance from members of your family. Many buyers somtimes receive help with their down payment help from giving family members who may be prepared to help them get into their first home. Your family members may be inclined to help you reach the milestone of owning your own home.

Learn about housing finance agencies. These agencies extend special mortgage loans to low and moderate-income borrowers, buyers interested in remodeling a home within a particular part of the city, and other groups as specified by each agency. Financing with this kind of agency, you can be given an interest rate that is below market, down payment assistance and other benefits. Housing finance agencies may help you with a lower interest rate, help with your down payment, and provide other benefits. The primary purpose of not-for-profit housing finance agencies is to boost the purchase of homes in particular parts of the city.

Explore no-down and low-down mortgage loan programs.

  • Federal Housing Administration (FHA) loans

    The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in assisting low and moderate-income buyers qualify for mortgage loans. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals who need to qualify for home financing. FHA aids first-time homebuyers and others who may not be eligible for a typical mortgage by themselves, by providing mortgage insurance to the lenders. Down payment amounts for FHA loans are below those for traditional mortgage loans, even though these mortgages have average interest rates. The required down payment may be as low as 3 percent and the closing costs could be financed in the mortgage loan.

  • VA loans

    VA loans are backed by the U.S. Department of Veterans Affairs. Veterens and service people are eligible for a VA loan, which usually offers a low fixed rate of interest, no down payment, and limited closing costs. Even though the VA does not issue the loans, it does issue a certificate of eligibility to qualify for a VA mortgage.

  • Piggy-back loans

    You may finance a down payment with a second mortgage that closes with the first. Most of the time, the piggyback loan is for 10 percent of the home's amount, while the first mortgage finances 80 percent. Rather than the usual 20 percent down payment, the buyer just has to pull together the remaining 10 percent.

  • Carry-Back loans

    In a "carry back" situation, the seller commits to loan you some of his home equity to help you with your down payment funds. In this scenario, you would finance the largest portion of the purchase price with a traditional lending institution and finance the remaining amount with the seller. Usually this type of second mortgage has higher interest.

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

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

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