Your Down Payment

Many folks who are looking to purchase a new house can easily qualify for a mortgage loan, but they can't afford a large down payment. We have a few suggestions

Tighten your belt and save. Scrutinize your budget to uncover ways you can cut expenses to save for your down payment. You could also try enrolling in an automatic savings plan to have a portion of your pay automatically moved into savings. You would be wise to look into some big expenses in your spending history that you can give up, or trim, at least temporarily. For example, you may decide to move into less expensive housing, or stay close to home for your vacation.

Work a second job and sell things you do not need. Maybe you can get an additional job and save your earnings. Additionally, you can make a comprehensive inventory of things you may be able to sell. Broken gold jewelry can be sold at local jewelers. Multiple small items could add up to a fair amount at a garage or tag sale. Also, you might want to consider selling any investments you own.

Borrow from your retirement funds. Investigate the parameters of your specific plan. You can borrow funds from a 401(k) plan for you down payment or withdraw from an Individual Retirement Account. Make sure you comprehend the tax consequences, your obligation for repaying funds, and any penalties for withdrawing early.

Request a gift from family. First-time buyers somtimes receive help with their down payment assistance from giving family members who may be prepared to help them get into their own home. Your family members may be eager to help you reach the goal of owning your first home.

Contact housing finance agencies. Special mortgate loan programs are offered to homebuyers in specific circumstances, such as low income homebuyers or homebuyers looking to remodel homes in a targeted part of town, among others. Financing with a housing finance agency, you may be given an interest rate that is below market, down payment help and other advantages. Housing finance agencies may help you with a reduced interest rate, help with your down payment, and provide other benefits. The main purpose of not-for-profit housing finance agencies is to boost residence ownership in particular places.

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

  • Federal Housing Administration (FHA) mortgages

    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 to moderate-income buyers get mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers in getting mortgages. FHA aids first-time homebuyers and others who may not be able to qualify for a typical mortgage by themselves, by providing mortgage insurance to the private lenders. Down payment totals for FHA mortgages are less than those for conventional mortgage loans, although these mortgages hold average rates of interest. Closing costs can be included in the mortgage, and your down payment could be as low as 3% of the purchase price.

  • VA mortgages

    With a guarantee from the Department of Veterans Affairs, a VA loan assists service people and veterans. This particular loan does not require a down payment, has mimimal closing costs, and offers a competitive rate of interest. Although the VA does not provide the mortgage loans, it does issue a certificate of eligibility to qualify for a VA mortgage.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes at the same time as the first. Most of the time, the piggyback loan is for 10 percent of the home's amount, and the first mortgage covers 80 percent. The homebuyer covers the remaining 10%, rather than needing to put together the usual 20% down payment.

  • Carry-Back loans

    In a "carry back" situation, the seller agrees to loan you a portion of his home equity to help you get your down payment funds. In this scenario, you would finance the majority of the purchase price with a traditional mortgage lending institution and borrow the remainder from the seller. Usually you'll pay a somewhat higher rate on the loan financed by the seller.

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

Need to talk about down payments? Give us a call at (203) 526-9345.

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