Building Your Down Payment

Many folks who would like to purchase a new home qualify for several different kinds of mortgages, but they don't have much to pay the standard down payment. Want to buy a new house, but aren't sure how to put together your down payment?

Tighten your belt and save. Turn your budget upside-down to discover extra money to save for your down payment. Also, you can look into bank programs through which some of your paycheck is automatically placed into savings every pay period. You might look into some big expenses in your spending history that you can give up, or reduce, at least temporarily. For example, you may decide to move into less expensive housing, or stay close to home for your family vacation.

Work a second job and sell things you don't need. Maybe you can get a second job and build up your earnings. You can also get creative about the things you can sell. Multiple small items may add up to a fair amount at a garage or tag sale. You might also explore what any investments you own may sell for.

Borrow from your retirement funds. Explore the specifics of your particular plan. It is possible to borrow money from a 401(k) for a down payment or get a withdrawal from an IRA. Be sure you comprehend the tax ramifications, repayment terms, and early withdrawal penalties.

Ask for a gift from family. Many homebuyers are sometimes lucky enough to get down payment assistance from caring family members who are willing to help get them in their own home. Your family members may be happy at the chance to help you reach the milestone of buying your first home.

Learn about housing finance agencies. Provisional loan programs are offered to buyers in certain situations, such as low income purchasers or buyers looking to remodel homes in a specific area, among others. With the help of this kind of agency, you can receive a below market interest rate, down payment help and other perks. These types of agencies may assist you with a lower interest rate, help with your down payment, and provide other advantages. The primary goal of non-profit housing finance agencies is promoting the purchase of homes in certain areas.

Learn about low-down and no-down mortgage loan programs.

  • Federal Housing Administration (FHA) mortgage loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a vital role in assisting low to moderate-income families get mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals who wish to qualify for home financing. FHA provides mortgage insurance to private lenders, enabling new homebuyers who will not qualify for a conventional loan, to receive a mortgage. Interest rates for an FHA loan are usually the going interest rate, while the down payment requirements with an FHA loan are less than those of conventional loans. The down payment may be as low as three percent while the closing costs might be financed in the mortgage.

  • VA loans

    Guaranteed by the Department of Veterans Affairs, a VA loan is offered to service people and veterans. This special loan requires no down payment, has limited closing costs, and provides a competitive rate of interest. While it's true that the loans are not actually provided by the VA, the office verfifies borrowers by providing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes along with the first. Usually the first mortgage covers 80% of the cost of the home and the "piggyback" funds 10%. The borrower pays the remaining 10%, instead of putting the usual 20% down payment.

  • Carry-Back loans

    In the case of a seller "carrying back a second mortgage," the you borrow part of the seller's home equity.. The buyer finances the highest percentage of the purchase price through a traditional mortgage program and borrows the remaining funds from the seller. Generally, this type of second mortgage has higher interest.

The feeling of accomplishment will be the same, no matter which strategy you use to put together your down payment. Your new home will be worth it!

Want to discuss down payments? Call us at (713) 528-1245.

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