Your Down Payment

Lots of people who are looking to purchase a new house qualify for several different kinds of mortgages, but they can't afford a large down payment. We have a few ideas

Tighten your belt and save. Be on the look-out for ways you can reduce your expenditures to put away money for a down payment. Also, you can look into bank programs in which a portion of your paycheck is automatically placed into savings each pay period. Some practical ways to save additional funds include moving into a residence that is less expensive, and skipping your family vacation for a year or two.

Work a second job and sell items you don't need. Maybe you can find a second job to get your down payment money. You can also get creative about the things you can sell. Maybe you have collectibles you can sell on an online auction, or household goods for a garage or tag sale. Also, you can look into selling any investments you hold.

Tap into retirement funds. Investigate the provisions of your retirement program. Some people get down payment money by withdrawing from Individual Retirement Accounts or borrowing from their 401(k) plans. Be sure you are clear about any penalties, the way this may affect on your income taxes, and repayment terms.

Ask for help from family members. First-time homebuyers somtimes get help with their down payment help from caring parents and other family members who may be willing to help get them in their own home. Your family members may be inclined to help you reach the milestone of buying your own home.

Contact housing finance agencies. Special loan programs are offered to homebuyers in specific circumstances, like low income homebuyers or future homeowners looking to improve houses in a targeted neighborhood, among others. Working through a housing finance agency, you may be given an interest rate that is below market, down payment help and other incentives. These kinds of agencies may help you with a lower rate of interest, help with your down payment, and provide other assistance. These non-profit agencies to build up community in specific places.

Explore no-down and low-down mortgages.

  • Federal Housing Administration (FHA) mortgage 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 aiding low to moderate-income individuals qualify for mortgage loans. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA assists first-time buyers and others who might not be able to qualify for a typical mortgage on their own, by providing mortgage insurance to private lenders. Down payment amounts for FHA mortgages are below those with typical mortgages, even though these loans hold current rates of interest. Closing costs might be financed within the mortgage, while your down payment might be as low as 3 percent of the total.

  • VA mortgages

    With a guarantee from the Department of Veterans Affairs, a VA loan is offered to service people and veterans. This special loan requires no down payment, has mimimal closing costs, and offers a competitive rate of interest. Even though the mortgages don't originate from the VA, the department verfifies applicants by providing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that you close along with the first. Most of the time, the first mortgage covers 80% of the purchase price and the "piggyback" is for 10%. The borrower pays the remaining 10%, rather than having to put together the typical 20% down payment.

  • Carry-Back loans

    In a "carry back" agreement, the seller agrees to loan you a portion of his home equity to help you with your down payment funds. The buyer finances the majority of the purchase price with a traditional mortgage program and finances the remaining funds with the seller. Typically you'll pay a slightly higher interest rate with the loan from the seller.

The satisfaction will be the same, no matter how you manage to get together your down payment. Your new home will be your reward!

Want to discuss the best options for down payments? Call us at 469-640-0400.

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