Your Down Payment

Lots of buyers can qualify for a loan, but they don't have much to pay the standard down payment. Here are a few methods that will help you put together a down payment

Slash your budget and build up savings. Scrutinize your budget to uncover extra money to save for your down payment. You could also try enrolling in an automatic savings plan at your bank to have a percentage of your pay automatically deposited into your savings account. Some practical ways to save additional funds include moving into less expensive housing, and skipping a year's vacation.

Sell items you do not really need and get a second job. Try to find a second job. This can be rough, but the temporary difficulty can help you get your down payment. In addition, you can put together an exhaustive list of things you may be able to sell. Broken gold jewelry can be sold at local jewelers. Maybe you have desirable items you can put up for sale at an auction website, or quality household goods for a tag or garage sale. Also, you might want to consider selling any investments you own.

Tap into your retirement funds. Research the details of your individual plan. Some homebuyers get down payment money from withdrawing from Individual Retirement Accounts or borrowing from 401(k) programs. You will need to be sure you are clear about any penalties, the effect this may have on your income taxes, and repayment terms.

Request a generous gift from family. Many buyers somtimes get help with their down payment assistance from gracious family members who may be eager to help them get into their own home. Your family members may be eager to help you reach the goal of having your own home.

Contact housing finance agencies. These types of agencies provide special loan programs for moderate and low income homebuyers, buyers interested in renovating a residence in a targeted area, and other particular types of buyers as defined by the finance agency. Working with this kind of agency, you can get a below market interest rate, down payment help and other advantages. These kinds of agencies may assist you with a reduced rate of interest, get you your down payment, and provide other benefits. The primary purpose of non-profit housing finance agencies is boosting residence ownership in targeted places.

Learn about low-down and no-down mortgage loans.

  • Federal Housing Administration (FHA) mortgages

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in helping low and moderate-income buyers get mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals who wish to get home financing. FHA provides mortgage insurance to private lenders, helping the buyers to become eligible for a mortgage loan. Interest rates with an FHA loan are normally the current interest rate, while the down payment with an FHA loan will be lower than those of conventional loans. The down payment may go as low as 3 percent while the closing costs may be included in the mortgage.

  • VA mortgage loans

    Guaranteed by the Department of Veterans Affairs, a VA loan qualifies veterens and service people. This special loan requires no down payment, has mimimal closing costs, and provides the advantage of a competitive interest rate. While it's true that the loans aren't actually issued by the VA, the department verfifies borrowers by providing eligibility certificates.

  • Piggy-back loans

    You may finance your down payment using a second mortgage that closes at the same time as the first. Generally 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%, instead of come up with the typical 20% down payment.

  • Carry-Back loans

    In the case of the seller "carrying back a second mortgage," the seller loans you part of his or her home equity. You would borrow the majority of the purchase price from a traditional mortgage lender and finance the remaining amount with the seller. Typically, this type of second mortgage has higher interest.

No matter how you gather your down payment, the thrill of owning your own home will be just as great!

Want to discuss your down payment? Give us a call: 720-598-8300.

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