Your Down Payment

Many buyers qualify for a mortgage loan, but they don't have much to put up a down payment. Here are a few ways to get together your down payment

Cut expenses and save. Be on the look-out for ways you can trim your monthly expenses to save toward a down payment. There are bank programs through which a portion of your paycheck is automatically placed into a savings account every pay period. You would be wise to look into some big expenses in your spending history that you can do without, or reduce, at least temporarily. Here are a couple of examples: you may decide to move into less expensive housing, or skip a family vacation.

Work more and sell items you do not need. Try to get an additional job. This can be exhausting, but the temporary trial can help you get your down payment. In addition, you can make an exhaustive list of things you may be able to sell. Broken gold jewelry can be sold at local jewelers. A closetful of small items could add up to a fair amount at a garage or tag sale. You could also research what any investments you hold may bring if sold.

Borrow from your retirement funds. Check the parameters of your particular program. You can pull out money from a 401(k) plan for a down payment or perform a withdrawal from an IRA. Be sure you know about any penalties, the way this may affect on your taxes, and repayment obligation.

Ask for a generous gift from family. Many homebuyers somtimes get down payment help from gracious family members who are prepared to help get them in their own home. Your family members may be happy at the chance to help you reach the goal of having your first home.

Contact housing finance agencies. These types of agencies extend provisional mortgage loans to low and moderate-income borrowers, buyers interested in renovating a residence within a targeted area, and other groups as specified by each agency. With the help of a housing finance agency, you can receive an interest rate that is below market, down payment help and other perks. Housing finance agencies can assist eligible buyers with a lower rate of interest, get you your down payment, and provide other advantages. These non-profit agencies to promote home ownership in certain places.

Research no-down and low-down mortgage loans.

  • FHA mortgages

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in helping low to moderate-income Americans qualify for mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers who need to qualify for mortgages. FHA provides mortgage insurance to the private lenders, enabling new homebuyers who may not be eligible for a conventional loan, to receive financing. Down payment sums for FHA loans are below those with typical mortgages, even though these loans come with average interest rates. The required down payment can go as low as three percent while the closing costs might be covered by the mortgage.

  • VA mortgage loans

    VA loans are backed by the U.S. Department of Veterans Affairs. Veterens and service people can benefit from a VA loan, which typically offers a low interest rate, no down payment, and reduced closing costs. Even though the VA does not actually issue the mortgage loans, it does issue a certificate of eligibility to apply for a VA loan.

  • Piggy-back loans

    You can finance your down payment with a second mortgage that closes at the same time as the first. Generally the piggyback loan takes care of 10 percent of the home's price, and the first mortgage finances 80 percent. The homebuyer pays the remaining 10%, rather than putting the usual 20% down payment.

  • Carry-Back loans

    In a "carry back" mortgage, the seller agrees to loan you part of his home equity to help you get your down payment money. The buyer finances the majority of the purchase price through a traditional mortgage program and borrows the remainder from the seller. Often, this form of second mortgage will have higher interest.

No matter your method of getting together your down payment money, the thrill of reaching the goal of owning your own home will be just as great!

Need to talk about down payment options? Call us: (718) 477-4405.

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