Your Down Payment

Lots of people who would like to buy a new house qualify for several different kinds of mortgages, but they can't afford a large down payment. Get started here

Slash the budget and build up savings. Scrutinize your budget to uncover extra money to go toward your down payment. Also, you can look into bank programs in which some of your take-home pay is automatically deposited into a savings account each pay period. Some effective strategies to build up funds include moving into a residence that is less expensive, and staying local for your vacation this year.

Sell items you do not really need and get a second job. Perhaps you can find a second job to get your down payment money. You can also get creative about the items you can sell. Multiple small things can add up to a fair amount at a garage or tag sale. Also, you might want to consider selling any investments you hold.

Borrow from a retirement plan. Investigate the parameters of your retirement program. Some homebuyers get down payment money from withdrawing from IRAs or borrowing from their 401(k) programs. Be sure to find out about the tax consequences, your obligation for repaying funds, and any early withdrawal penalties.

Ask for assistance from generous family members. Many buyers are often fortunate enough to receive down payment help from thoughtful parents and other family members who are willing to help them get into their first home. Your family members may be pleased to help you reach the milestone of owning your own home.

Contact housing finance agencies. Special mortgage programs are extended to buyers in certain circumstances, such as low income buyers or future homeowners looking to renovating houses in a particular place, among others. With the help of this kind of agency, you can get an interest rate that is below market, down payment help and other perks. Housing finance agencies may assist eligible buyers with a reduced interest rate, get you your down payment, and provide other assistance. The principal mission of not-for-profit housing finance agencies is promoting the purchase of homes in certain places.

Find out about low-down and no-down mortgage loan programs.

  • 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 helping low to moderate-income individuals qualify for mortgage loans. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals who wish to qualify for mortgages. FHA helps first-time buyers and others who might not be able to qualify for a traditional mortgage by themselves, by providing mortgage insurance to lenders. Interest rates for an FHA loan typically feature the going interest rate, while the down payment requirements with an FHA mortgage will be smaller than those of conventional loans. The required down payment can go as low as three percent and the closing costs can be packaged in the mortgage.

  • VA mortgages

    VA loans are guaranteed by the Department of Veterans Affairs. Veterens and service people can get a VA loan, which typically offers a reasonable rate of interest, no down payment, and reduced closing costs. Although the mortgages don't originate from the VA, the office verfifies borrowers by issuing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes along with the first. Generally the first mortgage covers 80% of the purchase price and the "piggyback" is for 10%. The homebuyer pays the remaining 10%, instead of having to put together the usual 20% down payment.

  • Carry-Back loans

    In a "carry back" mortgage, the seller commits to loan you a piece of his home equity to assist you with your down payment funds. The buyer finances most of the purchase price through a traditional mortgage program and borrows the remaining funds from the seller. Typically you will pay a slightly higher interest rate on the loan from the seller.

No matter how you gather your down payment funds, the thrill of owning your own home will be just as sweet!

Want to discuss down payments? Give us a call: (203) 526-9345.

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