Your Down Payment

Many buyers qualify for several different kinds of mortgages, but they don't have a large sum of cash to put up the standard down payment. Here are a few tips:

Slash your budget and build up savings. Scrutinize the budget to find extra money to go toward your down payment. Also, you can look into bank programs through which a specific portion of your take-home pay is automatically placed into a savings account every pay period. Some effective strategies to build up funds include moving into housing that is less expensive, and staying local for your vacation for a year or two.

Sell items you don't really need and get a second job. Perhaps you can find an additional job to get your down payment money. In addition, you can make an exhaustive list of items you can sell. Unused gold jewelry can be sold at local jewelers. Maybe you own desirable items you can sell at an online auction, or quality household items for a tag or garage sale. Also, you can consider selling any investments you own.

Borrow from retirement funds. Research the details for your particular plan. It is possible to borrow money from a 401(k) plan for you down payment or perform a withdrawal from an IRA. Make sure to ask your plan representative about the tax ramifications, your obligation for repaying the money, and any early withdrawal penalties.

Ask for a generous gift from your family. First-time buyers are sometimes fortunate enough to get help with their down payment assistance from thoughtful family members who are prepared to help get them in their first home. Your family members may be inclined to help you reach the goal of having your own home.

Learn about housing finance agencies. Provisional mortgage programs are given to homebuyers in specific circumstances, such as low income homebuyers or people planning to remodel houses in a targeted part of town, among others. With the help of a housing finance agency, you can be given an interest rate that is below market, down payment assistance and other benefits. Housing finance agencies may help eligible buyers with a reduced rate of interest, get you your down payment, and offer other advantages. These non-profit agencies exist to build up community in specific areas.

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

  • FHA loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in assisting low and moderate-income Americans qualify for mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA assists first-time buyers and others who might not be eligible for a typical loan on their own, by offering mortgage insurance to the lenders. Interest rates with an FHA loan are typically the current interest rate, but the down payment for an FHA loan will be below those of conventional loans. The required down payment can be as low as three percent while the closing costs might be financed in the mortgage.

  • VA mortgage loans

    VA loans are backed by the U.S. Department of Veterans Affairs. Service persons and veterans can benefit from a VA loan, which usually offers a reasonable fixed rate of interest, no down payment, and minimal closing costs. Although the mortgage loans are not actually issued by the VA, the department certifies borrowers 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. Usually the piggyback loan is for 10 percent of the purchase price, while the first mortgage finances 80 percent. The borrower pays the remaining 10%, instead of come up with the typical 20% down payment.

  • Carry-Back loans

    In a "carry back" situation, the seller commits to lend you a portion of his home equity to assist you with your down payment funds. The buyer funds the majority of the purchase price with a traditional mortgage program and borrows the remaining funds from the seller. Often, this kind of second mortgage will have a higher rate of interest.

No matter your method of getting together your down payment, the satisfaction of owning your own home will be just as sweet!

Need to talk about down payment options? Give us a call at 425-508-9988.

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