Your Down Payment

Lots of borrowers can qualify for various loan programs, but they can't afford a large down payment. Do you want to buy a new house, but aren't sure how to get together your down payment?

Tighten your belt and save. Be on the look-out for ways to trim your monthly expenses to save toward a down payment. You could also try enrolling in an automatic savings plan to automatically have a predetermined portion of your take-home pay deposited into savings. Some practical methods to put together funds include moving into less expensive housing, and staying home for your vacation for a year or two.

Sell items you don't really need and get a part-time job. Look for a second job. This can be exhausting, but the temporary trial can provide your down payment money. You can also get creative about the things you could be able to sell. Maybe you own collectibles you can put up for sale on an online auction, or quality household goods for a garage or tag sale. You might also research what any investments you own could bring if sold.

Borrow from a retirement plan. Explore the details of your individual plan. You can borrow money from a 401(k) plan for a down payment or withdraw from an Individual Retirement Account. Make sure you understand about any penalties, the effect this could have on income taxes, and repayment obligation.

Ask for assistance from family members. First-time homebuyers somtimes receive down payment assistance from giving parents and other family members who are able to help get them in their first home. Your family members may be happy at the chance to help you reach the goal of owning your own home.

Contact housing finance agencies. Special loan programs are offered to buyers in specific situations, such as low income homebuyers or people looking to improve houses in a targeted area, among others. With the help of this type of agency, you may be given a below market interest rate, down payment help and other advantages. Housing finance agencies can assist eligible homebuyers with a lower rate of interest, get you your down payment, and provide other advantages. These non-profit programs exist to promote community in certain areas.

Learn about low-down and no-down mortgage loans.

• 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 a vital part in aiding low and moderate-income Americans get mortgages. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA helps first-time buyers and others who would not be eligible for a typical loan on their own, by providing mortgage insurance to the private lenders. Interest rates with an FHA loan are normally the current interest rate, but the down payment requirements for an FHA mortgage are below those of conventional loans. The down payment may be as low as three percent and the closing costs can be covered by the mortgage.

• VA mortgages

  Guaranteed by the Department of Veterans Affairs, a VA loan is offered to service people and veterans. This specialized loan does not require a down payment, has limited closing costs, and provides the advantage of a competitive rate of interest. While the mortgages don't originate from the VA, the department certifies borrowers by issuing eligibility certificates.

• Piggy-back loans

  You may finance your down payment through a second mortgage that closes with the first. Most of the time, the piggyback loan is for 10 percent of the home's amount, and the first mortgage finances 80 percent. The homebuyer pays the remaining 10%, rather than come up with the typical 20% down payment.

• Carry-Back loans

  In a "carry back" agreement, the seller agrees to lend you a piece of his own equity to help you get your down payment money. The buyer funds most of the purchase price through a traditional mortgage program and borrows the remainder from the seller. Usually you will pay a slightly higher rate on the loan financed by the seller.

Need to talk about down payments? Give us a call at 866-300-1550.