Building Your Down Payment

Lots of borrowers can easily qualify for several different kinds of mortgages, but they can't afford a large down payment. Below are a few straightforward methods that will help you get together your down payment

Reduce expenses 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 a portion of your paycheck is automatically deposited into a savings account each pay period. You could look into some big expenses in your spending history that you can live without, or trim, at least temporarily. For example, you may decide to move into less expensive housing, or stay close to home for your vacation.

Sell things you don't need and get a part-time job. Look for an additional job. This can be rough, but the temporary trial can help you get your down payment. Additionally, you can put together a comprehensive list of things you may be able to sell. Unused gold jewelry can bring a good price from local jewelers. Maybe you have desirable items you can sell on an auction website, or quality household items for a tag or garage sale. You could also look into what any investments you own may sell for.

Borrow your down payment from your retirement plan. Investigate the parameters of your retirement plan. Some people get down payment money by withdrawing from their Individual Retirement Accounts or borrowing from their 401(k) programs. Make sure you understand the tax ramifications, your obligation for repaying the money, and penalties for withdrawing early.

Request a gift from your family. First-time buyers are often lucky enough to get down payment assistance from thoughtful parents and other family members who are anxious to help them get into their own home. Your family members may be willing to help you reach the milestone of owning your own home.

Research housing finance agencies. These agencies offer special mortgate loan programs- for moderate and low income homebuyers, buyers with an interest in rehabilitating a home within a specific area, and additional certain types of buyers as specified by the finance agency. With the help of this kind of agency, you can get an interest rate that is below market, down payment help and other perks. These types of agencies may help you with a reduced interest rate, get you your down payment, and offer other assistance. The principal purpose of non-profit housing finance agencies is to promote residential ownership in targeted places.

Explore no-down and low-down mortgage loans.

  • Federal Housing Administration (FHA) mortgages

    The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays a critical role in assisting low to moderate-income Americans get mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA provides mortgage insurance to the private lenders, helping the buyers to become eligible for financing. Interest rates for an FHA loan generally feature the going interest rate, while the down payment requirements with an FHA loan are below those of conventional loans. Closing costs can be included in the mortgage, and the down payment might be as low as 3% of the total.

  • VA loans

    VA loans are backed by the U.S. Department of Veterans Affairs. Veterens and service people can receive a VA loan, which typically offers a low fixed rate of interest, no down payment, and limited closing costs. While the VA does not issue the mortgages, it does certify eligibility to apply 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 purchase price, and the first mortgage covers 80 percent. The homebuyer pays the remaining 10%, instead of putting the typical 20% down payment.

  • Carry-Back loans

    With a carry-back mortgage, the seller loans you part of his or her equity. You would finance the largest portion of the purchase price with a traditional lender and borrow the remaining amount from the seller. Usually you will pay a somewhat higher interest rate with the loan financed by the seller.

The satisfaction will be the same, no matter how you manage to come up with the down payment. Your brand new home will be well worth it!

Need to talk about the best options for down payments? Give us a call: 720-598-8300.

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