Your Down Payment

Many borrowers can easily qualify for a loan, but they can't afford a large down payment. We have a few suggestions

Tighten your belt and save. Scrutinize the budget to discover extra money to go toward your down payment. There are bank programs in which some of your take-home pay is automatically transferred into savings every pay period. Some effective approaches to save additional funds include moving into housing that is less expensive, and staying home for your family vacation this year.

Work more and sell items you do not need. Try to get a second job. This can be rough, but the temporary trial can provide your down payment money. You can also get creative about the things you can sell. Maybe you have collectibles you can put up for sale at an online auction, or household items for a garage or tag sale. Also, you might want to look into selling any investments you own.

Tap into retirement funds. Research the details of your particular plan. It is possible to borrow money from a 401(k) for you down payment or make a withdrawal from an IRA. Make sure you understand the tax ramifications, your obligation for repaying funds, and any penalties for withdrawing early.

Ask for help from family members. Many homebuyers somtimes get down payment help from gracious parents and other family members who may be prepared to help get them in their own home. Your family members may be pleased at the chance to help you reach the milestone of owning your first home.

Research housing finance agencies. These agencies provide special mortgage loans for moderate and low income homebuyers, buyers interested in rehabilitating a home in a targeted part of the city, and additional groups as defined by each agency. Financing with this type of agency, you probably will get an interest rate that is below market, down payment help and other perks. These kinds of agencies can help you with a lower rate of interest, help with your down payment, and offer other benefits. These non-profit programs to promote the value of homes in certain neighborhoods.

Find out about low-down and no-down mortgages.

  • FHA loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a critical role in assisting low to moderate-income families get mortgage loans. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals in getting mortgages. FHA assists first-time buyers and others who may not be able to qualify for a typical mortgage loan by themselves, by providing mortgage insurance to the private lenders. Interest rates for an FHA mortgage are generally the current interest rate, while the down payment requirements for an FHA loan are below those of conventional loans. The down payment may go as low as 3 percent and the closing costs may be covered by the mortgage loan.

  • VA loans

    VA loans are backed by the Department of Veterans Affairs. Service persons and veterans are eligible for a VA loan, which typically offers a low fixed interest rate, no down payment, and reduced closing costs. While it's true that the mortgages don't originate from the VA, the department certifies applicants by providing eligibility certificates.

  • Piggy-back loans

    You can fund your down payment with a second mortgage that closes with the first. Generally the first mortgage is for 80% of the purchase amount and the "piggyback" is for 10%. Rather than the usual 20 percent down payment, the buyer just has to cover the remaining 10 percent.

  • Carry-Back loans

    In a "carry back" agreement, the seller commits to lend you a piece of his own equity to help you with your down payment funds. The buyer funds the majority of the purchase price with a traditional mortgage program and borrows the remainder from the seller. Typically you'll pay a slightly higher interest rate on the loan from the seller.

No matter your strategy of getting together your down payment, the thrill of living in your own home will be just as great!

Need to talk about the best options for down payments? Give us a call: (713) 528-1245.

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