Building Your Down Payment

Lots of buyers can qualify for various loan programs, but they don't have a large sum of cash to pay a down payment. Want to buy a new home, but don't know how to put together your down payment?

Tighten your belt and save. Look for ways you can trim your expenses to put away money for a down payment. You might also try enrolling in an automatic savings plan at your bank to have a percentage of your pay automatically deposited into savings. You could 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 decide to move into less expensive housing, or stay close to home for your vacation.

Sell items you do not need and get a second job. Look for a second job. This can be rough, but the temporary trial can provide your down payment money. Additionally, you can make an exhaustive inventory of items you may be able to sell. Unworn gold jewelry can be sold at local jewelry stores. You might own collectibles you can sell on an auction website, or quality household goods for a garage or tag sale. You can also explore what any investments you own will bring if sold.

Tap into retirement funds. Research the details of your particular plan. Many homebuyers get down payment money from withdrawing from Individual Retirement Accounts or borrowing from 401(k) programs. You will need to ensure you understand about any penalties, the effect this could have on income taxes, and repayment obligation.

Ask for assistance from generous family members. Many homebuyers somtimes receive down payment help from gracious parents and other family members who may be prepared to help get them in their first home. Your family members may be inclined to help you reach the goal of buying your own home.

Research housing finance agencies. These types of agencies offer special mortgage programs to moderate and low income buyers, buyers interested in renovating a house within a targeted part of the city, and additional particular types of buyers as specified by the agency. Working through a housing finance agency, you probably will get a below market interest rate, down payment assistance and other perks. These types of agencies may help you with a reduced rate of interest, get you your down payment, and provide other advantages. The primary mission of not-for-profit housing finance agencies is to boost residence ownership in particular parts of the city.

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

  • FHA mortgage loans

    The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), plays an important role in assisting low and moderate-income families qualify for mortgages. Part of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) helps individuals get FHA provides mortgage insurance to private lenders, enabling new homebuyers who will not be eligible for a typical mortgage, to get financing. Down payment amounts for FHA mortgages are lower than those with typical mortgage loans, even though these mortgages hold current interest rates. Closing costs might be financed in the mortgage, while your down payment may be as low as 3% of the total amount.

  • VA mortgages

    Guaranteed by the Department of Veterans Affairs, a VA loan is offered to veterens and service people. This specialized loan requires no down payment, has mimimal closing costs, and offers a competitive rate of interest. While the VA does not provide the mortgage 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 along with the first. Generally the piggyback loan takes care of 10 percent of the home's price, and the first mortgage covers 80 percent. Instead of the traditional 20 percent down payment, the buyer will just have to pull together the remaining 10 percent.

  • Carry-Back loans

    In a "carry back" situation, the seller agrees to lend you part of his own equity to help you get your down payment money. The buyer funds the highest percentage of the purchase price through a traditional mortgage program and finances the remaining funds with the seller. Typically you'll pay a somewhat higher interest rate with the loan financed by the seller.

The satisfaction will be the same, no matter which method you use to come up with the down payment. Your new home will be your reward!

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

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Carter Financial Solutions

2291 W. March Ln Suite A100
Stockton, CA 95207