Your Down Payment

Many folks who are looking to buy a new home qualify for various loan programs, but they don't have much to put up the standard down payment. Here's where you start

Tighten your belt and save. Look for ways you can reduce your expenditures to save toward a down payment. You might also try enrolling in an automatic savings plan at your bank to have a portion of your pay automatically moved into a savings account. You could look into some big expenses in your spending history that you can give up, or reduce, at least temporarily. For example, you may move into less expensive housing, or skip a family vacation.

Work more and sell things you do not need. Look for an additional job. This can be exhausting, but the temporary difficulty can provide your down payment money. Additionally, you can make an exhaustive list of things you may be able to sell. Unworn gold jewelry can bring a good price from local jewelry stores. You might own desirable items you can sell on an online auction, or household goods for a garage or tag sale. You could also look into what your investments may bring if sold.

Borrow your down payment from your retirement plan. Explore the specifics for your particular plan. You may take out money from a 401(k) for a down payment or make a withdrawal from an IRA. Be sure to find out about the tax ramifications, repayment terms, and possible early withdrawal penalties.

Ask for assistance from members of your family. Many homebuyers are sometimes fortunate enough to receive down payment help from giving family members who are willing to help them get into their own home. Your family members may be eager to help you reach the goal of having your first home.

Learn about housing finance agencies. These agencies offer special loan programs for low and moderate-income borrowers, buyers interested in renovating a home in a targeted part of the city, and other groups as specified by each finance agency. With the help of a housing finance agency, you probably will be given an interest rate that is below market, down payment assistance and other advantages. These kinds of agencies can assist eligible buyers with a lower rate of interest, get you your down payment, and offer other assistance. These non-profit agencies exist to boost the value of homes in particular neighborhoods.

Explore no-down and low-down mortgages.

  • Federal Housing Administration (FHA) mortgage loans

    The Federal Housing Administration (FHA), which is inside the U.S. Department of Housing and Urban Development (HUD), plays an important role in assisting low and moderate-income individuals qualify for mortgages. An office of the U.S. Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA provides mortgage insurance to the private lenders, making the buyers eligible for a loan. Down payment amounts for FHA mortgages are lower than those for typical mortgage loans, although these loans come with current interest rates. Closing costs may be included in the mortgage, while the down payment can be as low as 3% of the total amount.

  • VA mortgages

    VA loans are backed by the Department of Veterans Affairs. Service persons and veterans can receive a VA loan, which typically offers a reasonable rate of interest, no down payment, and reduced closing costs. While it's true that the mortgages are not actually issued by the VA, the department verfifies borrowers by issuing eligibility certificates.

  • Piggy-back loans

    You may fund a down payment with a second mortgage that closes along with the first. Often the first mortgage covers 80% of the purchase amount and the "piggyback" funds 10%. The borrower pays the remaining 10%, rather than putting the typical 20% down payment.

  • Carry-Back loans

    With a carry-back mortgage, the you borrow a portion of the seller's home equity.. In this scenario, you would borrow the largest portion of the purchase price from a traditional lender and finance the remaining amount with the seller. Typically you will pay a slightly higher interest rate on the loan financed by the seller.

No matter how you gather your down payment, the thrill of living in your own home will be just as great!

Want to discuss the best options for down payments? Give us a call: 4787462063.

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