Your Down Payment

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Lots of buyers can easily qualify for several different kinds of mortgages, but they don't have a lot of money to pay the standard down payment. Do you want to look into getting a new home, but aren't sure how you should put together a down payment?

Reduce expenses and save. Turn your budget upside-down to discover ways you can cut expenses to save for your down payment. You could also try enrolling in an automatic savings plan to automatically have a set portion of your take-home pay transferred into a savings account. Some practical methods to put together funds include moving into housing that is less expensive, and staying local for your vacation for a year or two.

Sell items you do not need and get a second job. Maybe you can get a second job and save your earnings. You can also get creative about the things you might be able to sell. You may have desirable items you can sell at an auction website, or household items for a garage or tag sale. Also, you might want to think about selling any investments you hold.

Tap into retirement funds. Check the parameters of your retirement program. It is possible to take out money from a 401(k) for a down payment or withdraw from an IRA. Be sure you are knowledgeable about any penalties, the effect this will have on your taxes, and repayment terms.

Ask for help from family members. Many homebuyers sometimes get down payment help from thoughtful parents and other family members who may be eager to help get them in their first home. Your family members may be pleased at the chance to help you reach the milestone of owning your own home.

Research housing finance agencies. Provisional mortgage loans are provided to homebuyers in specific circumstances, such as low income homebuyers or buyers planning to remodel homes in a targeted area, among others. Financing with a housing finance agency, you probably will receive an interest rate that is below market, down payment help and other advantages. These kinds of agencies may help eligible buyers with a lower rate of interest, help with your down payment, and offer other advantages. The main goal of non-profit housing finance agencies is build up home ownership in certain areas.

Research no-down and low-down mortgage loans.

• Federal Housing Administration (FHA) mortgages

  The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays a significant part in helping low to moderate-income buyers qualify for mortgage loans. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers in getting mortgages. FHA helps first-time homebuyers and others who might not be able to qualify for a traditional mortgage loan by themselves, by providing mortgage insurance to lenders. Down payment amounts for FHA mortgages are less than those for conventional mortgage loans, although these loans hold current interest rates. Closing costs may be included in the mortgage, and the down payment could be as low as 3% of the total amount.

• VA loans

  Guaranteed by the Department of Veterans Affairs, a VA loan qualifies veterans and service people. This particular loan requires no down payment, has limited closing costs, and provides a competitive interest rate. Although the loans don't originate from the VA, the department certifies applicants by providing eligibility certificates.

• Piggy-back loans

  A piggy-back loan is a second mortgage that closes along with the first. Usually the first mortgage covers 80% of the cost of the home and the "piggyback" funds 10%. Rather than the traditional 20 percent down payment, the buyer just has to cover the remaining 10 percent.

• Carry-Back loans

  In the case of the seller "carrying back a second mortgage," the seller loans you part of his or her equity. The buyer finances the highest percentage of the purchase price through a traditional mortgage program and borrows the remaining funds from the seller. Typically, this form of second mortgage will have higher interest.

Need to talk about the best options for down payments? Call us at 770-792-7979.