Your Down Payment

Many borrowers qualify for various loan programs, but they don't have a large sum of cash to put up the standard down payment. Do you want to look into getting a new home, but don't know how to put together your down payment?

Slash your budget and build up savings. Look for ways to reduce your expenditures to put away money for a down payment. You could also try enrolling in an automatic savings plan at your bank to have a portion of your pay automatically transferred into savings. You might look into some big expenses in your budget that you can live without, or reduce, at least temporarily. Here are a couple of examples: you may move into less expensive housing, or skip a family vacation.

Sell things you don't really need and find a second job. Maybe you can get an additional job and save your earnings. You can also get serious about the possessions you actually need and the items you can put up for sale. A closetful of small items could add up to a nice sum at a garage or tag sale. You could also research what any investments you hold may bring if sold.

Borrow from retirement funds. Research the specifics for your individual plan. You may borrow funds from a 401(k) for you down payment or withdraw from an IRA. Make sure you are clear about any penalties, the way this could affect on your taxes, and repayment terms.

Request a generous gift from family. Many homebuyers somtimes receive down payment assistance from giving family members who may be anxious to help get them in their own home. Your family members may be eager to help you reach the goal of buying your first home.

Learn about housing finance agencies. Provisional loan programs are extended to buyers in specific situations, like low income homebuyers or buyers looking to remodel homes in a particular neighborhood, among others. Financing with this kind of agency, you probably will be given an interest rate that is below market, down payment help and other perks. Housing finance agencies can assist you with a lower rate of interest, get you your down payment, and provide other advantages. The central purpose of not-for-profit housing finance agencies is promoting the purchase of homes in targeted areas.

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

  • Federal Housing Administration (FHA) loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays a vital part in assisting low to moderate-income Americans qualify for mortgage loans. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) assists homebuyers in getting mortgages. FHA provides mortgage insurance to the private lenders, enabling new homebuyers who will not qualify for a typical mortgage, to receive a mortgage. Interest rates for an FHA mortgage usually feature the going interest rate, but the down payment requirements with an FHA loan will be below those of conventional loans. The required down payment can be as low as 3 percent and the closing costs might be financed in the mortgage loan.

  • VA mortgage loans

    VA loans are backed by the Department of Veterans Affairs. Service persons and veterans qualify for a VA loan, which generally offers a low fixed interest rate, no down payment, and minimal closing costs. Although the loans are not actually provided by the VA, the office verfifies borrowers by providing eligibility certificates.

  • Piggy-back loans

    You can fund your down payment through a second mortgage that closes along with the first. Most of the time, the first mortgage covers 80% of the cost of the home and the "piggyback" funds 10%. Rather than the usual 20 percent down payment, the buyer just has to cover the remaining 10 percent.

  • Carry-Back loans

    In the option of a seller "carrying back a second mortgage," the you borrow a portion of the seller's home equity.. You would borrow the largest portion of the purchase price from a traditional lending institution and borrow the remainder from the seller. Usually you'll pay a somewhat higher interest rate on the loan financed by the seller.

The feeling of accomplishment will be the same, no matter how you manage to come up with your down payment. Your brand new home will be well worth it!

Need to talk about the best options for down payments? Give us a call: (478) 746-2063.

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