Your Down Payment

Lots of folks who would like to buy a new home can easily qualify for several different kinds of mortgages, but they can't afford a large down payment. Want to buy a new house, but don't know how you should get together a down payment?

Reduce expenses and save. Scrutinize the budget to uncover extra money to go toward your down payment. There are bank programs in which a portion of your take-home pay is automatically placed into a savings account every pay period. Some practical methods to put together funds include moving into a residence that is less expensive, and skipping a year's vacation.

Work a second job and sell items you do not need. Try to find an additional job. This can be exhausting, but the temporary trial can provide your down payment money. Additionally, you can put together an exhaustive list of things you can sell. Unworn gold jewelry can bring a good price from local jewelers. You may have collectibles you can put up for sale on an online auction, or household goods for a tag or garage sale. You might also look into what any investments you have will bring if sold.

Borrow your down payment from a retirement plan. Explore the specifics for your individual plan. Many people get down payment money from withdrawing funds from their IRAs or taking funds out of 401(k) programs. Make sure you are knowledgable about any penalties, the way this may affect on your income taxes, and repayment obligation.

Ask for help from generous members of your family. Many buyers somtimes get help with their down payment help from caring parents and other family members who may be anxious to help them get into their own home. Your family members may be pleased to help you reach the milestone of buying your first home.

Research housing finance agencies. Special mortgage loans are provided to homebuyers in specific situations, such as low income purchasers or homebuyers looking to remodel houses in a certain area, among others. With the help of this kind of agency, you probably will be given an interest rate that is below market, down payment assistance and other benefits. Housing finance agencies can assist you with a reduced interest rate, help with your down payment, and provide other assistance. These non-profit programs were formed to build up community in particular areas.

Explore no-down and low-down mortgages.

  • Federal Housing Administration (FHA) mortgage loans

    The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays a significant role in aiding low to moderate-income individuals get mortgage loans. Part of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids homebuyers who wish to qualify for home financing. FHA aids first-time buyers and others who may not be able to qualify for a typical loan on their own, by providing mortgage insurance to the lenders. Interest rates with an FHA mortgage typically feature the current interest rate, while the down payment with an FHA loan will be below those of conventional loans. The down payment may go as low as 3 percent and the closing costs can be covered by the mortgage.

  • VA loans

    VA loans are guaranteed by the Department of Veterans Affairs. Service persons and veterans can receive a VA loan, which typically offers a low rate of interest, no down payment, and reduced closing costs. Although the mortgages don't originate from the VA, the department verfifies applicants by issuing eligibility certificates.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that you close at the same time as the first. Often the first mortgage is for 80% of the purchase amount and the "piggyback" funds 10%. In contrast to the traditional 20 percent down payment, the buyer just has to cover the remaining 10 percent.

  • Carry-Back loans

    With a carry-back mortgage, the seller loans you part of his or her equity. The buyer finances most of the purchase price through a traditional mortgage program and borrows the remainder from 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 method you use to get together the down payment. Your brand new home will be your reward!

Need to talk about the best options for down payments? Give us a call at (718) 639-9500.

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