Your Down Payment

Lots of people who would like to purchase a new house can easily qualify for several different kinds of mortgages, but they can't afford a large down payment. Here are a few tips:

Slash your budget and build up savings. Scrutinize your budget to find extra money to go toward your down payment. There are bank programs through which some of your paycheck is automatically transferred into a savings account every pay period. You might look into some big expenses in your spending history that you can live without, or reduce, at least temporarily. For example, you may move into less expensive housing, or skip a family vacation.

Work a second job and sell items you don't need. Perhaps you can find a second job to get your down payment money. In addition, you can make an exhaustive list of items you can sell. Broken gold jewelry can be sold at local jewelers. Multiple small things can add up to a fair amount at a garage or tag sale. You could also explore what any investments you own will sell for.

Borrow from your retirement funds. Explore the details for your particular plan. It is possible to borrow funds from a 401(k) plan for a down payment or make a withdrawal from an Individual Retirement Account. Make sure you are clear about any penalties, the way this could affect on income taxes, and repayment terms.

Request a generous gift from your family. Many homebuyers somtimes receive down payment assistance from gracious parents and other family members who are able to help get them in their own home. Your family members may be pleased to help you reach the milestone of having your first home.

Research housing finance agencies. These agencies provide provisional mortgage programs to moderate and low income buyers, buyers with an interest in sprucing up a home within a specific area, and other groups as specified by the finance agency. With the help of a housing finance agency, you may receive a below market interest rate, down payment help and other perks. These kinds of agencies may assist you with a lower rate of interest, get you your down payment, and provide other benefits. These non-profit agencies to promote home ownership in certain neighborhoods.

Find out about low-down and no-down mortgages.

  • 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 significant role in assisting low and moderate-income individuals get mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers who wish to get home financing. FHA offers mortgage insurance to private lenders, making the buyers eligible for financing. Down payment amounts for FHA loans are smaller than those of typical mortgage loans, although these loans have average rates of interest. Closing costs might be financed within the mortgage, and the down payment might be as low as 3% of the purchase price.

  • VA mortgage loans

    VA loans are guaranteed by the U.S. Department of Veterans Affairs. Veterens and service people qualify for a VA loan, which generally offers a competitive interest rate, no down payment, and reduced closing costs. Even though the mortgage loans don't originate from the VA, the department verfifies applicants by providing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that you close at the same time as the first. Most of the time, the piggyback loan is for 10 percent of the home's price, while the first mortgage finances 80 percent. Rather than the usual 20 percent down payment, the homebuyer just has to cover the remaining 10 percent.

  • Carry-Back loans

    With a carry-back mortgage, the you borrow a portion of the seller's home equity.. The buyer finances most of the purchase price with a traditional mortgage program and borrows the remainder from the seller. Typically you'll pay a somewhat higher interest rate with the loan from the seller.

No matter how you gather your down payment, the satisfaction of reaching the goal of owning your own home will be just as sweet!

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

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