Your Down Payment

Many borrowers qualify for various loan programs, but they can't afford a large down payment. Start here

Tighten your belt and save. Scrutinize your budget to uncover extra money to go toward your down payment. You might also try enrolling in an automatic savings plan at your bank to automatically have a predetermined portion of your paycheck moved into savings. Some practical ways to put together funds include moving into less expensive housing, and skipping your family vacation for a year or two.

Sell things you do not really need and find a second job. Look for a second job. This can be rough, but the temporary trial can help you get your down payment. Additionally, you can make a comprehensive inventory of things you may be able to sell. Broken gold jewelry can be sold at local jewelry stores. Maybe you have collectibles you can sell on an auction website, or household goods for a garage or tag sale. Also, you can look into selling any investments you own.

Borrow your down payment from a retirement plan. Investigate the provisions of your retirement program. You can pull out funds from a 401(k) plan for a down payment or withdraw from an IRA. You will need to ensure you understand about any penalties, the effect this could have on your income taxes, and repayment terms.

Ask for help from family members. Many homebuyers somtimes get down payment help from giving parents and other family members who may be eager to help get them in 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 extend special mortgate loan programs to moderate and low income homebuyers, buyers interested in sprucing up a residence in a targeted area, and other certain types of buyers as specified by each agency. With the help of a housing finance agency, you can get an interest rate that is below market, down payment help and other benefits. These types of agencies may assist eligible buyers with a reduced rate of interest, help with your down payment, and offer other assistance. The principal purpose of not-for-profit housing finance agencies is to boost the purchase of homes in targeted areas.

Explore no-down and low-down mortgage loans.

  • Federal Housing Administration (FHA) loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a significant role in helping low to moderate-income individuals qualify for mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals who wish to get mortgage loans. FHA assists first-time buyers and others who would not be able to qualify for a traditional mortgage loan on their own, by providing mortgage insurance to the private lenders. Interest rates with an FHA mortgage generally feature the market interest rate, while the down payment requirements with an FHA mortgage are lower than those of conventional loans. Closing costs may be included in the mortgage, while the down payment might be as low as 3% of the total amount.

  • VA loans

    VA loans are backed by the Department of Veterans Affairs. Veterens and service people are eligible for a VA loan, which usually offers a competitive fixed interest rate, no down payment, and reduced closing costs. Although the VA doesn't actually issue the mortgages, it does certify eligibility to apply for a VA loan.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes along with the first. Often the first mortgage is for 80% of the purchase amount and the "piggyback" is for 10%. The borrower covers the remaining 10%, rather than come up with the typical 20% down payment.

  • Carry-Back loans

    In the option of a seller "carrying back a second mortgage," the you borrow a portion of the seller's home equity.. You would borrow the largest portion of the purchase price from a traditional mortgage lender and finance the remainder with the seller. Often, this kind of second mortgage has a higher rate of interest.

The feeling of accomplishment will be the same, no matter which approach you use to come up with your down payment. Your new home will be worth it!

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

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