Your Down Payment

Many borrowers qualify for a mortgage loan, but they can't afford a large down payment. Below are a few straightforward methods that will help you get together a down payment

Reduce expenses and save. Be on the look-out for ways to reduce your monthly expenses to put away money for a down payment. There are bank programs in which some of your paycheck is automatically transferred into a savings account each pay period. Some effective methods to put together funds include moving into less expensive housing, and skipping a year's vacation.

Work more and sell things you don't need. Try to get a second job. This can be exhausting, but the temporary trial can provide your down payment money. In addition, you can put together a comprehensive list of things you may be able to sell. Unused gold jewelry can be sold at local jewelers. You might own collectibles you can sell on an auction website, or household goods for a garage or tag sale. You might also explore what any investments you hold may bring if sold.

Borrow from your retirement plan. Explore the specifics for your individual plan. Some homebuyers get down payment money by withdrawing from their Individual Retirement Accounts or pulling money out of their 401(k) programs. Make sure to ask your plan representative about the tax ramifications, your obligation for repayment, and possible penalties for withdrawing early.

Request a gift from your family. First-time homebuyers are often lucky enough to get help with their down payment assistance from giving family members who are eager to help them get into their first home. Your family members may be pleased to help you reach the goal of having your own home.

Research housing finance agencies. Special mortgate loan programs are given to buyers in specific circumstances, such as low income buyers or future homeowners looking to remodel houses in a particular place, among others. With the help of this type of agency, you may get an interest rate that is below market, down payment assistance and other perks. Housing finance agencies may help you with a lower rate of interest, get you your down payment, and provide other advantages. The central goal of not-for-profit housing finance agencies is promoting the purchase of homes in particular parts of the city.

Find out about low-down and no-down mortgage loans.

  • FHA mortgage loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a vital part in helping low to moderate-income individuals qualify for mortgage loans. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids individuals in getting home financing. FHA helps first-time buyers and others who would not be able to qualify for a conventional mortgage by themselves, by offering mortgage insurance to the lenders. Interest rates for an FHA mortgage are generally the market interest rate, while 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 may be included in the mortgage.

  • VA loans

    Guaranteed by the Department of Veterans Affairs, a VA loan qualifies service people and veterans. This special loan does not require a down payment, has limited closing costs, and offers a competitive interest rate. Although the VA doesn't issue the mortgages, it does certify eligibility to qualify for a VA mortgage.

  • Piggy-back loans

    You can fund your down payment through a second mortgage that closes with the first. Usually the first mortgage covers 80% of the cost of the home and the "piggyback" is for 10%. Instead of 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 seller loans you part of his or her home equity. You would finance the largest portion of the purchase price with a traditional mortgage lender and finance the remainder with the seller. Often, this form of second mortgage has higher interest.

No matter your strategy of pulling together down payment money, the satisfaction of reaching the goal of living in your own home will be just as sweet!

Need to talk about down payments? Call us at 425-508-9988.

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