Building Your Down Payment

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Lots of buyers can easily qualify for a loan, but they don't have much to put up the standard down payment. Here are a few straightforward ways to put together your down payment

Slash your budget and build up savings. Turn your budget upside-down to discover ways you can cut expenses to save for your down payment. There are bank programs through which some of your paycheck is automatically transferred into savings every pay period. You would be wise to look into some big expenses in your budget that you can give up, or trim, at least temporarily. Here are a couple of examples: you might move into less expensive housing, or skip a family vacation.

Sell things you do not really need and get a second job. Maybe you can find a second job and save your earnings. You can also get creative about the things you can sell. You might have collectibles you can sell at an auction website, or household items for a tag or garage sale. You can also research what your investments could sell for.

Borrow your down payment from a retirement plan. Investigate the parameters of your particular plan. Some homebuyers get down payment money by withdrawing what they need from Individual Retirement Accounts or taking money out of their 401(k) plans. Be sure you are knowledgeable about any penalties, the way this will affect on income taxes, and repayment terms.

Ask for a gift from your family. First-time homebuyers sometimes get down payment assistance from thoughtful parents and other family members who are able to help them get into their first home. Your family members may be pleased to help you reach the milestone of having your first home.

Research housing finance agencies. Provisional mortgage loans are extended to homebuyers in specific situations, such as low income homebuyers or people planning to improve houses in a particular area, among others. With the help of this type of agency, you probably will get an interest rate that is below market, down payment assistance and other benefits. Housing finance agencies may assist you with a lower rate of interest, get you your down payment, and provide other benefits. These non-profit programs exist to build up home ownership in specific areas.

Explore no-down and low-down mortgages.

  • FHA mortgage loans

    The Federal Housing Administration (FHA), which functions as part of the U.S. Department of Housing and Urban Development (HUD), plays an important part in assisting low to moderate-income individuals qualify for mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA helps first-time buyers and others who might not be eligible for a traditional mortgage loan by themselves, by offering mortgage insurance to the lenders. Interest rates for an FHA loan are normally the market interest rate, but the down payment requirements with an FHA mortgage are less than those of conventional loans. Closing costs might be included in the mortgage, and your down payment might be as low as 3% of the purchase price.

  • VA loans

    With a guarantee from the Department of Veterans Affairs, a VA loan is offered to service people and veterans. This particular loan does not require a down payment, has limited closing costs, and provides a competitive interest rate. While the VA doesn't actually issue the loans, it does issue a certificate of eligibility to apply for a VA loan.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes 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 covers the remaining 10%, instead of needing to pull together the usual 20% down payment.

  • Carry-Back loans

    We a seller carries back a second mortgage, the you borrow part of the seller's home equity.. The buyer funds most of the purchase price through a traditional mortgage program and borrows the remainder from the seller. Generally, this type of second mortgage will have higher interest.

No matter your method of pulling together down payment money, the thrill of living in your own home will be just as sweet!

Need to talk about the best options for down payments? Give us a call: 561.775.2724.

ayment money, the thrill of living in your own home will be just as sweet!

Need to talk about the best options for down payments? Give us a call: 561.775.2724.


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