Your Down Payment

Many buyers can qualify for several different kinds of mortgages, but they can't afford a large down payment. Want to buy a new home, but aren't sure how to put together a down payment?

Reduce expenses and save. Scrutinize your budget to uncover ways you can cut expenses to go toward your down payment. There are bank programs in which a specific portion of your paycheck is automatically transferred into a savings account every pay period. You might look into some big expenses in your spending history that you can give up, or reduce, at least temporarily. For example, you might move into less expensive housing, or stay local for your vacation.

Sell things you do not really need and get a second job. Perhaps you can find a second job and build up your earnings. You can also get creative about the things you can sell. You may have desirable items you can put up for sale on an online auction, or household items for a tag or garage sale. You might also research what any investments you have could bring if sold.

Borrow your down payment from your retirement plan. Explore the specifics of your individual plan. Some people get down payment money from withdrawing from their IRAs or borrowing from 401(k) plans. Make sure to learn about the tax consequences, repayment terms, and possible penalties for withdrawing early.

Ask for a gift from your family. First-time buyers somtimes receive down payment assistance from giving parents and other family members who are anxious to help get them in their first home. Your family members may be willing to help you reach the milestone of having your own home.

Contact housing finance agencies. These agencies offer special mortgage loans for moderate and low income buyers, buyers interested in rehabilitating a home in a particular area, and other groups as specified by the agency. With the help of this kind of agency, you can get a below market interest rate, down payment assistance and other benefits. Housing finance agencies can assist eligible homebuyers with a lower rate of interest, help with your down payment, and offer other assistance. These non-profit agencies to boost community in specific places.

Find out about low-down and no-down mortgage loans.

• FHA mortgages

  The Federal Housing Administration (FHA), which is inside the U.S. Department of Housing and Urban Development (HUD), plays a vital role in assisting low and moderate-income individuals qualify for mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals in getting mortgages. FHA aids first-time homebuyers and others who may not be able to qualify for a conventional mortgage loan on their own, by providing mortgage insurance to the lenders. Down payment sums for FHA loans are below those for conventional mortgages, even though these loans have average interest rates. The required down payment may go as low as 3 percent while the closing costs can be financed in the mortgage.

• VA mortgages

  VA loans are backed by the U.S. Department of Veterans Affairs. Veterens and service people can benefit from a VA loan, which typically offers a low interest rate, no down payment, and limited closing costs. While the VA does not issue the mortgage loans, it does certify eligibility to apply for a VA mortgage.

• Piggy-back loans

  You can fund a down payment using 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%. The borrower pays the remaining 10%, rather than having to put together the usual 20% down payment.

• Carry-Back loans

  In a "carry back" situation, the seller agrees to loan you a piece of his own equity to help you get your down payment money. You would finance the majority of the purchase price with a traditional mortgage lending institution and finance the remaining amount with the seller. Typically, this type of second mortgage will have higher interest.

Need to talk about your down payment? Call us: 9722039033.