Building Your Down Payment

Lots of borrowers qualify for various loan programs, but they don't have a lot of money to put up a down payment. Get started here

Tighten your belt and save. Look for ways you can trim your expenses to save toward a down payment. Also, you can look into bank programs through which some of your paycheck is automatically deposited into a savings account each pay period. Some practical ways to save additional funds include moving into housing that is less expensive, and skipping your vacation for a year or two.

Sell items you do not need and find a second job. Perhaps you can get a second job and build up your earnings. You can also seriously consider the possessions you really need and the items you may be able to put up for sale. You might own desirable items you can sell on an auction website, or household goods for a tag or garage sale. You can also research what your investments could bring if sold.

Borrow funds from a retirement plan. Investigate the parameters of your specific plan. Many homebuyers get down payment money from withdrawing from Individual Retirement Accounts or pulling funds out of 401(k) programs. Be sure you comprehend the tax consequences, repayment terms, and any penalties for withdrawing early.

Request a gift from your family. First-time homebuyers somtimes get down payment assistance from giving family members who may be anxious to help them get into their first home. Your family members may be pleased at the chance to help you reach the goal of owning your first home.

Learn about housing finance agencies. These types of agencies provide provisional loan programs to moderate and low income borrowers, buyers with an interest in renovating a residence within a specific part of the city, and additional particular types of buyers as specified by the finance agency. With the help of this type of agency, you probably will receive a below market interest rate, down payment assistance and other perks. These kinds of agencies can assist you with a lower interest rate, help with your down payment, and offer other assistance. These non-profit agencies were formed to promote the value of homes in certain places.

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

  • 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 critical part in aiding low to moderate-income Americans get mortgages. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists individuals who need to qualify for mortgage loans. FHA helps first-time buyers and others who might not be able to qualify for a conventional mortgage by themselves, by providing mortgage insurance to the lenders. Down payment requirements for FHA loans are lower than those of typical mortgage loans, even though these mortgages hold current interest rates. Closing costs might be included in the mortgage, while your down payment might be as low as 3 percent of the total amount.

  • VA mortgages

    VA loans are backed by the Department of Veterans Affairs. Service persons and veterans can get a VA loan, which usually offers a competitive fixed interest rate, no down payment, and reduced closing costs. While the mortgage loans don't originate from the VA, the office verfifies borrowers by providing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that you close along with the first. Usually the piggyback loan takes care of 10 percent of the home's amount, while the first mortgage finances 80 percent. Instead of the usual 20 percent down payment, the homebuyer will just have to pull together the remaining 10 percent.

  • Carry-Back loans

    In a "carry back" situation, the seller commits to loan you a portion of his own equity to help you with your down payment money. In this scenario, you would finance the majority of the purchase price with a traditional lending institution and finance the remainder with the seller. Typically you will pay a somewhat higher rate on the loan from 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 your reward!

Want to discuss your down payment? Give us a call: (718) 639-9500.

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