Building Your Down Payment

Lots of buyers can qualify for various loan programs, but they don't have a lot of money to pay a down payment. Here are a few straightforward methods that will help you put together a down payment

Tighten your belt and save. Be on the look-out for ways to reduce your monthly expenditures to put away money for a down payment. You could also try enrolling in an automatic savings plan at your bank to automatically have a set amount from your take-home pay moved into savings. You could look into some big expenses in your spending history that you can do without, or trim, at least temporarily. For example, you may move into less expensive housing, or stay local for your family vacation.

Sell items you don't really need and get a second job. Maybe you can find an additional job to get your down payment money. You can also get creative about the items you could be able to put up for sale. A closetful of small things can add up to a fair amount at a garage or tag sale. Also, you might want to look into selling any investments you hold.

Borrow from retirement funds. Explore the specifics for your individual plan. You may borrow funds from a 401(k) plan for you down payment or make a withdrawal from an Individual Retirement Account. Make sure you know about any penalties, the way this may affect on income taxes, and repayment terms.

Ask for a generous gift from your family. First-time homebuyers somtimes get help with their down payment assistance from giving family members who are anxious to help get them in their first home. Your family members may be pleased at the chance to help you reach the goal of buying your own home.

Contact housing finance agencies. Provisional loan programs are provided to homebuyers in certain situations, such as low income buyers or buyers planning to remodel houses in a targeted neighborhood, among others. With the help of this kind of agency, you probably will be given a below market interest rate, down payment assistance and other incentives. These kinds of agencies may assist eligible homebuyers with a reduced interest rate, get you your down payment, and provide other assistance. The central goal of non-profit housing finance agencies is to promote the purchase of homes in specific parts of the city.

Research no-down and low-down mortgages.

  • Federal Housing Administration (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 aiding low to moderate-income families qualify for mortgage loans. An office of the United States Department of Housing and Urban Development(HUD), FHA (Federal Housing Administration) aids homebuyers who wish to qualify for mortgage loans. FHA provides mortgage insurance to the private lenders, helping the buyers to become eligible for a home loan. Interest rates for an FHA mortgage generally feature the market interest rate, while the down payment with an FHA loan will be lower than those of conventional loans. The down payment may go as low as 3 percent and the closing costs could be covered by the mortgage.

  • VA mortgages

    VA loans are backed by the U.S. Department of Veterans Affairs. Veterens and service people can benefit from a VA loan, which typically offers a low interest rate, no down payment, and limited closing costs. Even though the VA doesn't actually finance the mortgages, it does certify eligibility to qualify for a VA mortgage.

  • Piggy-back loans

    A piggy-back loan is a second mortgage that closes at the same time as the first. In most cases the first mortgage is for 80% of the cost of the home and the "piggyback" is for 10%. Instead of the traditional 20 percent down payment, the homebuyer just has to pull together the remaining 10 percent.

  • Carry-Back loans

    In a "carry back" situation, the seller agrees to loan you a piece of his own equity to assist you with your down payment money. The buyer finances the highest percentage of the purchase price through a traditional mortgage program and finances the remaining funds with the seller. Typically, this form of second mortgage will have a higher rate of interest.

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

Need to talk about down payment options? Give us a call: 8668408745.

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Carter Financial Solutions

2291 W. March Ln Suite A100
Stockton, CA 95207