Your Down Payment

Lots of folks who are looking to purchase a new home qualify for several different kinds of mortgages, but they don't have a lot of money to pay a down payment. Here are a few methods that will help you put together a down payment

Cut expenses and save. Turn your budget inside out to discover extra money to go toward your down payment. You also might enroll in an automatic savings plan to have a percentage of your payroll automatically deposited into a savings account. You would be wise to look into some big expenses in your budget that you can live without, or trim, at least temporarily. For example, you may decide to move into less expensive housing, or skip a family vacation.

Sell things you don't need and find a second job. Try to find an additional job. This can be rough, but the temporary difficulty can help you get your down payment. You can also seriously consider the possessions you really need and the things you can put up for sale. A closetful of small things may add up to a nice sum at a garage or tag sale. You might also look into what any investments you have may sell for.

Tap into retirement funds. Research the details of your particular plan. Many people get down payment money by withdrawing what they need from their Individual Retirement Accounts or borrowing from their 401(k) programs. Be sure you comprehend the tax consequences, repayment terms, and possible penalties for withdrawing early.

Ask for assistance from generous family members. Many buyers are sometimes fortunate enough to receive help with their down payment help from giving family members who are eager to help them get into their first home. Your family members may be inclined to help you reach the goal of having your own home.

Research housing finance agencies. Provisional mortgate loan programs are given to buyers in certain circumstances, such as low income purchasers or buyers planning to remodel houses in a certain place, among others. Financing through this type of agency, you probably will receive a below market interest rate, down payment help and other benefits. Housing finance agencies may help you with a lower rate of interest, get you your down payment, and provide other assistance. These non-profit programs to build up home ownership in specific areas.

Explore no-down and low-down mortgage loans.

  • FHA mortgages

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in assisting low to moderate-income families qualify for mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals who need to get mortgages. FHA assists first-time buyers and others who may not be eligible for a traditional loan on their own, by offering mortgage insurance to the private lenders. Interest rates with an FHA loan normally feature the market interest rate, but the down payment for an FHA loan will be below those of conventional loans. The down payment can go as low as 3 percent while the closing costs can be covered by the mortgage loan.

  • VA mortgage loans

    VA loans are backed by the Department of Veterans Affairs. Service persons and veterans can qualify for a VA loan, which usually offers a low fixed rate of interest, no down payment, and minimal closing costs. Although the loans are not actually financed by the VA, the department certifies applicants by issuing eligibility certificates.

  • Piggy-back loans

    You can fund a down payment using a second mortgage that closes with the first. Most of the time, the first mortgage is for 80% of the cost of the home and the "piggyback" funds 10%. In contrast to the usual 20 percent down payment, the buyer will just have to cover the remaining 10 percent.

  • Carry-Back loans

    In the option of the seller "carrying back a second mortgage," the you borrow part of the seller's home equity.. In this scenario, you would borrow the majority of the purchase price from a traditional mortgage lending institution and finance the remainder with the seller. Usually you'll pay a slightly higher rate with the loan from the seller.

No matter your method of pulling together down payment money, the satisfaction of owning your own home will be just as sweet!

Want to discuss down payments? Call us at 504-866-5626.

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