Putting Together Your Down Payment

Many folks who would like to buy a new home qualify for a mortgage loan, but they don't have a lot of money to put up a down payment. Here are a few straightforward ways to get together your down payment

Slash the budget and build up savings. Scrutinize your budget to uncover extra money to save for your down payment. There are bank programs in which a specific portion of your take-home pay is automatically placed into a savings account every pay period. You might 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 decide to move into less expensive housing, or skip a family vacation.

Work more and sell things you don't need. Look for a second job. This can be rough, but the temporary difficulty can help you get your down payment. You can also get creative about the items you can put up for sale. Maybe you own desirable items you can put up for sale at an online auction, or quality household goods for a garage or tag sale. You can also explore what your investments could bring if sold.

Borrow from your retirement funds. Explore the specifics for your particular plan. Many homebuyers get down payment money by withdrawing what they need from Individual Retirement Accounts or pulling funds out of their 401(k) plans. Be sure you are knowledgable about any penalties, the way this could affect on taxes, and repayment terms.

Ask for a generous gift from family. First-time homebuyers are often lucky enough to receive help with their down payment assistance from thoughtful parents and other family members who may be willing to help them get into their first home. Your family members may be eager to help you reach the goal of having your first home.

Contact housing finance agencies. These types of agencies offer special mortgate loan programs- for low and moderate-income homebuyers, buyers with an interest in sprucing up a residence within a targeted part of the city, and additional particular kinds of buyers as defined by the finance agency. Financing through this type of agency, you can get a below market interest rate, down payment help and other advantages. These types of agencies can assist eligible buyers with a lower interest rate, help with your down payment, and offer other advantages. The main goal of not-for-profit housing finance agencies is boosting residential ownership in targeted areas.

Research no-down and low-down mortgage loan programs.

  • Federal Housing Administration (FHA) loans

    The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), plays a significant part in assisting low and moderate-income buyers get mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA offers mortgage insurance to the private lenders, helping the buyers to become eligible for a mortgage. Down payment totals for FHA mortgages are lower than those with typical mortgages, although these loans hold current interest rates. The down payment may go as low as 3 percent and the closing costs could be covered by the mortgage.

  • VA loans

    VA loans are backed by the U.S. Department of Veterans Affairs. Service persons and veterans can benefit from a VA loan, which typically offers a low fixed interest rate, no down payment, and limited closing costs. Although the VA does not actually finance the mortgages, it does certify eligibility to apply for a VA mortgage.

  • Piggy-back loans

    You may fund a down payment with a second mortgage that closes along with the first. Most of the time, the piggyback loan is for 10 percent of the purchase price, and the first mortgage covers 80 percent. The homebuyer covers the remaining 10%, instead of having to pull together the usual 20% down payment.

  • Carry-Back loans

    With a carry-back mortgage, the seller loans you part of his or her equity. The buyer finances the highest percentage of the purchase price with a traditional mortgage program and borrows the remaining funds from the seller. Typically, this kind of second mortgage has higher interest.

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

Need to talk about down payment options? Call us: 8668408745.

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Carter Financial Solutions

2291 W. March Ln Suite A100
Stockton, CA 95207