Your Down Payment

Many buyers can easily qualify for various loan programs, but they don't have much to put up the standard down payment. Start here

Tighten your belt and save. Look for ways you can reduce your monthly expenses to set aside money for a down payment. You might also try enrolling in an automatic savings plan to automatically have a set amount from your paycheck deposited into savings. You could look into some big expenses in your budget that you can give up, or trim, at least temporarily. Here are a couple of examples: you might decide to move into less expensive housing, or stay close to home for your annual vacation.

Sell things you don't need and get a second job. Perhaps you can find a second job to get your down payment money. In addition, you can put together a comprehensive inventory of things you can sell. Broken gold jewelry can bring a good amount from local jewelers. You may have collectibles you can sell at an online auction, or household goods for a tag or garage sale. You might also research what any investments you own may sell for.

Borrow from retirement funds. Investigate the parameters of your particular program. It is possible to pull out funds from a 401(k) for you down payment or withdraw from an IRA. Be sure you are knowledgable about any penalties, the way this may affect on your taxes, and repayment terms.

Ask for assistance from family members. Many homebuyers somtimes get down payment assistance from giving family members who may be anxious to help get them in their first home. Your family members may be pleased to help you reach the milestone of having your own home.

Contact housing finance agencies. These types of agencies offer special mortgage programs for low and moderate-income homebuyers, buyers interested in rehabilitating a house within a specific part of the city, and additional specific kinds of buyers as specified by the finance agency. With the help of a housing finance agency, you may get an interest rate that is below market, down payment assistance and other advantages. These types of agencies can help eligible buyers with a reduced rate of interest, get you your down payment, and provide other advantages. The principal purpose of non-profit housing finance agencies is to promote the purchase of homes in targeted areas.

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

  • FHA loans

    The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays a significant role in helping low to moderate-income Americans get mortgages. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA provides mortgage insurance to private lenders, making the buyers eligible for a home loan. Down payment totals for FHA mortgages are lower than those for traditional mortgages, even though these loans have average rates of interest. Closing costs can be covered by the mortgage, and your down payment could be as low as 3 percent of the purchase price.

  • VA mortgage loans

    With a guarantee from the Department of Veterans Affairs, a VA loan qualifies service people and veterans. This particular loan does not require a down payment, has reduced closing costs, and provides the benefit of a competitive interest rate. While the VA doesn't actually issue 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 you close 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 borrower pays the remaining 10%, rather than come up with the typical 20% down payment.

  • Carry-Back loans

    In a "carry back" situation, the seller commits to lend you part of his home equity to help you get your down payment funds. You would finance the largest portion of the purchase price with a traditional lending institution and finance the remaining amount with the seller. Often, this type of second mortgage has a higher rate of interest.

No matter how you gather down payment funds, the thrill of reaching the goal of living in your own home will be just as great!

Need to talk about your down payment? Give us a call at (718) 477-4405.

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