Your Down Payment

Lots of borrowers qualify for various loan programs, but they can't afford a large down payment. Here are a few ideas:

Reduce expenses and save. Turn your budget inside out to discover extra money to save for your down payment. You might also try enrolling in an automatic savings plan at your bank to automatically have a set amount from your take-home pay deposited into a savings account. You would be wise to look into some big expenses in your spending history that you can give up, or reduce, at least temporarily. Here are a couple of examples: you may move into less expensive housing, or stay local for your annual vacation.

Work a second job and sell things you don't need. Perhaps you can get a second job to get your down payment money. Additionally, you can make a comprehensive inventory of items you may be able to sell. Unworn gold jewelry can bring a good price from local jewelry stores. Multiple small things can add up to a fair amount at a garage or tag sale. You could also explore what your investments could bring if sold.

Borrow money from a retirement plan. Investigate the parameters of your retirement plan. Some people get down payment money by withdrawing from their Individual Retirement Accounts or taking money out of 401(k) programs. Make sure you are knowledgable about any penalties, the way this could affect on taxes, and repayment obligation.

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

Research housing finance agencies. Special mortgage programs are provided to homebuyers in certain situations, like low income purchasers or buyers looking to renovating homes in a specific neighborhood, among others. Working through this type of agency, you may be given an interest rate that is below market, down payment help and other incentives. Housing finance agencies may assist you with a lower rate of interest, get you your down payment, and provide other assistance. These non-profit agencies to promote the value of homes in certain places.

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

• Federal Housing Administration (FHA) mortgage loans

  The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in aiding 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 who need to get home financing. FHA offers mortgage insurance to private lenders, enabling new homebuyers who will not be eligible for a typical mortgage loan, to obtain financing. Interest rates for an FHA mortgage normally feature the going interest rate, while the down payment for an FHA mortgage will be lower than those of conventional loans. The down payment can go as low as three percent and the closing costs may be financed in the mortgage loan.

• VA loans

  VA loans are backed by the Department of Veterans Affairs. Veterens and service people can receive a VA loan, which usually offers a competitive fixed rate of interest, no down payment, and reduced closing costs. While the loans don't originate from the VA, the department certifies borrowers by issuing eligibility certificates.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes along with the first. In most cases the first mortgage is for 80% of the purchase price and the "piggyback" is for 10%. In contrast to the usual 20 percent down payment, the homebuyer just has to pull together the remaining 10 percent.

• Carry-Back loans

  With a carry-back mortgage, the you borrow a portion of the seller's home equity.. You would borrow the majority of the purchase price from a traditional lender and borrow the remaining amount from the seller. Typically you'll pay a somewhat higher interest rate on the loan from the seller.

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

Need to talk about down payments? Call us: 866-300-1550.